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The Australian Taxation Office (ATO) has said that it is mining data to identify individuals with undisclosed offshore income and assets.
The ATO will significantly increase its compliance focus by examining data including information from overseas tax authorities on Australians with offshore investments. It will also make use of information from Australian and foreign banks on fund flows, interest and account balances, and information from informants regarding offshore accounts and money transfers to and from such accounts.
According to Deputy Commissioner Michael Cranston, the data will be used to encourage people to make a disclosure under the terms of Project DO IT, the ATO's offshore disclosure initiative. Those taking part in the amnesty will generally be assessed for the last four years, be liable to a maximum shortfall penalty of ten percent, and full shortfall interest charges, and will not be investigated by the ATO or referred for criminal investigation on the basis of their disclosures.
Cranston said: "We'll be asking some people to explain offshore transactions and suggesting that they may want to disclose under Project DO IT. At the same time, people involved in serious tax evasion may be subject to audit. As we consult with key financial institutions, tax advisers and accounting firms, they may get in touch with their clients to let them know it's time to get their affairs in order and disclose it under Project DO IT."
To date, the ATO has received 166 disclosures, raising an additional AUD13m (USD12m) in tax liabilities. There have been more than 250 expressions of interest, where taxpayers have identified themselves and said they will be making a disclosure. There have been more than 600 general inquiries.
"We expect a large number of disclosures towards the end of the initiative as taxpayers get their affairs in order. Most people getting in touch with us are reporting accounts in Switzerland, Israel, Liechtenstein, the Netherlands, South Africa, and Hong Kong, so we'll obviously be looking closely at [the] flow of funds to those countries," Cranston added.
Project DO IT will cease to be offered from December 19, 2014.
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