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ATO Amnesty deadline looms as hunt for offshore wealth continues

December 2014

The deadline for the Australian Tax Office's last tax amnesty ends on Friday 19 December, as thousands of Australians register to declare foreign income and assets. 

Taxpayers who have yet to disclose bank accounts, property and other income assets have until this Friday to do so. Failing to declare may result in some hefty penalties or possibly jail time.

Project Do It launched in March of this year and since then the taxpayers have declared more than $240 million in income and $1.7 billion in assets from more than 2500 taxpayers who have declared their assets.

Switzerland proved to be the most popular country for undeclared wealth, however others include:
  • United Kingdom
  • Israel
  • Singapore
  • Hong Kong and
  • Lichtenstein
According to the Tax Commissioner, most of the people who have been proactive in disclosing foreign assets are the descendants of migrants who moved to Australia in the 1950s and 1960s, many of who inherited both the wealth and a tax mess. 

For those people who have already taken action, the ATO has advised that there will be reduced penalties and a four-year cap on the penalty period. The ATO says "We will only assess tax for the years where the time limit for amending your return has not yet expired (generally the last four income years for taxpayers with offshore financial affairs)." The ATO has also said that voluntary disclosures have been given an assurance that they will not be investigated or referred for criminal investigation based on the information that is disclosed. 

However there remain number of taxpayers who have yet to declare their assets and with enhanced cooperation from Switzerland and other OECD and G20 countries, it is likely to become much easier for the ATO to discover and prosecute avoidance activity. 

The Australian Tax Office has particularly upped the ante for Australians with undisclosed foreign income or assets in Switzerland, by making it clear that they have informed sources on at least 122 people with Swiss bank accounts who have not yet declared the assets. The recent revisions to the Australian-Switzerland tax treaty means that it will be actively requesting the data on Australians with Swiss accounts almost immediately after the deadline has passed. 

According to the ATO, those who are caught with undeclared assets will face tax, penalties and potentially jail if it is able to prove avoidance activity. The ATO has made no secret of its data matching capabilities. 

If you have foreign assets or income that you have yet to declare, we strongly urge you to contact our team as soon as possible to ensure you can do so before the amnesty ends. 

Contact our International Tax team on 02 9957 4033 for assistance. 

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Last updated December 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.

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Disclaimer

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.

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