Amnesty for Australians who disclose their offshore assets

01 April 2014

Australians with undeclared offshore income and assets will be granted amnesty (albeit with a few penalties and interest) in return for a voluntary disclosure made before December 2014, according to a latest statement by ATO (The Australian Taxation Office).

“DO IT” or Disclose Offshore Income Today initiative launched by the ATO aims to give a chance to the tax evaders and those with unreported income and assets outside Australia to get their affairs in order and come clean to avoid penalties and criminal prosecution.

Australian tax payers who take advantage of the amnesty and voluntarily disclose their foreign assets will be assessed only for the last four years, and will incur a maximum shortfall penalty of a mere 10%. In addition, ATO will also provide assistance and certainty to taxpayers wishing to wind up their offshore structures.

In return tax payers are expected to disclose complete information about their offshore income, gains, and assets, and provide details of advisers who assisted them in the maintenance of their offshore structures.

The initiative is part of a ‘global crackdown’ on international tax havens, and comes at a time when ATO is rapidly expanding its data-matching capabilities to link Australian taxpayers with their offshore income and assets, while also exchanging significant amounts of information with other overseas tax authorities.

With increased information sharing between countries stemming from agreements at the G20, the “net is closing in on tax evaders around the world”, said Commissioner of taxation Chris Jordan.

While this generous offer may allow ATO to retrieve tax revenue that might have been forfeited otherwise, for a wider community it may be concerning if tax evaders and those with unreported income and offshore assets are let off scot-free.

“All taxpayers should be treated equally and that no groups should receive beneficial treatment from the Tax Office, particularly not the ones who are rich enough and well advised enough to look after themselves,” said Mark Chapman, head of Taxpayers Australia. “There should be a level playing field when it comes to taxation,” he added.

Mr. Chapman further added: “Any taxpayer who has been hit by the full force of the Tax Office as part of an audit (maybe paying penalties of up to 90% for their indiscretion and even facing prosecution) will be looking at this initiative and wondering why they didn’t just park all their money in Switzerland for a decade or two.”

Tags: Australia offshore assets offshore banking

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