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Increased Scrutiny Builds Over Unreported Offshore Income In Australia

by Carla Johnson, Investors Offshore.com, London

08 October 2007


Australia's Acting Commissioner of Taxation, Jennie Granger, has urged people to talk to the Australian Taxation Office (ATO) about any unreported offshore income as soon as possible.

Speaking to the Chartered Accountants Technical Conference in Sydney, Ms Granger revealed that: “Commencing in July this year there has already been 91 voluntary disclosures totalling $4.6 million in taxable income. One recent disclosure involved $700,000 in unreported income and resulted in penalties being reduced to 5 per cent of the tax payable. Where there is no voluntary disclosure and people intentionally disregard the tax law, penalties can be up to 75 per cent of the tax shortfall. For peace of mind I encourage anyone with concerns about their tax affairs to contact us as soon as possible."

Last year the Tax Office conducted around 170 audits and reviews, resulting in around $250 million in taxes and penalties. Commenting on this situation, Ms Granger continued: "The booklet we've published is designed to help people better understand their tax obligations when investing offshore and alerts them to the risks of getting involved in dodgy arrangements. Australia has made a number of breakthroughs in detecting, investigating and dealing with abusive offshore investment opportunities."

According to the Acting Tax Commissioner, Australia has not only increased information sharing with other administrations, but has also recently negotiated tax information exchange agreements with Antigua and Barbuda and the Netherlands Antilles, and already has one in place with Bermuda. Negotiations with a further seven countries with similar situations are underway, and another two sets of negotiations will commence in the next two months.

Concluding her speech, Ms Granger stated that: "Our message is simple; Australian residents are subject to tax on their income from all sources inside or outside of Australia."


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