ATO amnesty – declare foreign income now
On 27 March 2014, the ATO announced "Project DO IT: disclose offshore income today", focussed on taxpayers who earn income from overseas sources and have foreign assets.
This initiative makes it very attractive for eligible taxpayers to come forward given the unlimited nature of investigations into fraud and evasion in terms of years, rather than a cap offered by Project DO IT. Equally and particularly in light of the agreement not to further investigate or refer to other law enforcement agencies, this is an initiative to consider if you have outstanding international tax issues to address.
The ATO has signalled that after the deadline, more robust forms of audit will be pursued.
- This will be treated as a voluntary amendment request;
- Assessments will only go back as far as the amendment period for the taxpayer, typically 4 years;
- The tax shortfall penalty will be applied at 10%, or if their additional income is less than $20,000 no shortfall penalty will apply (interest will still apply); and
- They will not be referred for criminal investigation.
It's important to ensure that you speak to your accountant about this opportunity so they can decide whether to approach the ATO on your behalf. Clients who have unreported foreign income or assets but do not participate in the program are at risk of much more aggressive review and audit activity.
For more information about making a voluntary disclosure as part of Project DO IT, please contact us on 02 9957 4033 or via our contact form.
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Last updated April 2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.