ATO Launches New Drive Against Offshore Tax Evasion

by Mary Swire, Tax-News.com, Hong Kong

25 February 2004

The Australian Tax office has launched a fresh drive against offshore tax evasion with the publication of a new Tax Office guide entitled ‘Tax havens and tax administration’, which, according to Tax Commissioner Michael Carmody, is designed to warn people how to avoid being enticed into tax abusive arrangements.

“We are interested in helping taxpayers better understand what's legal or illegal in their dealings with tax havens,” commented Tax Commissioner Michael Carmody. “We also want people to be aware of the serious consequences of using tax havens in an attempt to avoid tax." (No doubt he meant to say, 'evade'.)

The Tax Office has set up a special taskforce to enhance its ability to tackle abusive tax haven arrangements. The Taskforce is looking at financial dealings between Australian taxpayers and 38 tax havens around the world.

The type of schemes coming in for special attention are those which try to:

• create deductions in Australia;
• avoid (sorry, evade) tax on tax haven income;
• provide access to tax haven funds on which no Australian tax has been paid.

"Before you start dealing with tax havens you should get independent advice from an Australian tax professional who knows about our tax laws or seek a ruling from the Tax Office," stated Carmody, adding:

"As the old saying goes, 'if it sounds too good to be true, it probably is'."

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