Australia Warns Offshore Accounts Holders

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

03 June 2010

The offshore voluntary disclosure initiative, introduced by the Australian Taxation Office (ATO) in December last year, will end on 30 June 2010, leaving Australian taxpayers less than one month to receive favourable terms if they declare unreported taxable income held offshore.

It was disclosed that the offshore voluntary disclosure has already encouraged over 4,000 people to come forward. By the end of May 2010, the initiative had resulted in the declaration of over AUD400m (USD333m) in undeclared income.

The Tax Commissioner, Michael D’Ascenzo, has warned taxpayers not to wait for another offer. “If you’ve been waiting to make a disclosure, or hoping we will extend the offer, now is the time to act,” he said. “This offer will end on June 30, 2010, and the concessional penalty arrangements for full disclosures will no longer be available.”

If a person’s additional taxable income after coming forward is AUD20,000 or less in a tax year, they will not need to pay a shortfall penalty for that year. If that income is more than AUD20,000, the ATO will apply a shortfall penalty at 10% for that year.

“The message we want to get across to people is come forward now, don’t wait for us to come to you,” D’Ascenzo continued. “There’s a much higher price to be paid later if we discover undeclared income through an audit process. Penalties can be as high as 90%, and we will seek criminal prosecutions in serious cases.”

It was pointed out that the ATO now has 25 tax information exchange agreements with other countries. “Through improved transparency, international cooperation and reform of secrecy jurisdictions we are closing the net on the abusive use of tax havens, and that means there are fewer places for people to hide income and assets offshore,” he added.

Recommended