The Tax Office today released the latest Tax havens and tax administration booklet outlining its concerns with tax haven arrangements and advice on how people can get their tax affairs in order.
Speaking to the Chartered Accountants Technical Conference in Sydney, Acting Commissioner of Taxation Jennie Granger urged people to take advantage of the opportunity to talk to us about any unreported offshore income as soon as possible.
Ã¢â‚¬Å“Commencing in July this year there has already been 91 voluntary disclosures totalling $4.6 million in taxable income.
Ã¢â‚¬Å“One recent disclosure involved $700,000 in unreported income and resulted in penalties being reduced to 5% of the tax payable.
Ã¢â‚¬Å“Where there is no voluntary disclosure and people intentionally disregard the tax law, penalties can be up to 75% of the tax shortfall.
Ã¢â‚¬Å“We are about to increase our compliance work in this area, but itÃ¢â‚¬â„¢s not too late to put things right and receive a reduced penalty.
Ã¢â‚¬Å“For peace of mind I encourage anyone with concerns about their tax affairs to contact us as soon as possible.
Ã¢â‚¬Å“Our message is simple; Australian residents are subject to tax on their income from all sources inside or outside of Australia.
Ã¢â‚¬Å“While there are legitimate reasons for dealing with a tax haven, arrangements designed to avoid paying the correct tax in Australia leave other Australians with a greater tax burden and undermine community confidence in our tax system.
Ã¢â‚¬Å“This booklet 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.
Ã¢â‚¬Å“Australia has made a number of breakthroughs in detecting, investigating and dealing with abusive tax haven arrangements.
Ã¢â‚¬Å“In fact tax administrations around the world are continually improving how they deal with issues surrounding tax havens.
Ã¢â‚¬Å“Increased information sharing with other administrations, the use of more sophisticated analytical tools and law changes are helping us to detect and deal with these types of arrangements,Ã¢â‚¬Å“ Ms Granger said.
Australia has also recently negotiated tax information exchange agreements with Antigua Barbuda and the Netherlands Antilles and already has one in place with Bermuda. Negotiations with a further seven tax haven countries are underway and another two negotiations will commence in the next two months.
Ã¢â‚¬Å“These agreements increase the transparency of cross-border transactions and complement the intelligence we already gather through AUSTRAC, overseas revenue authorities and other government departments and law enforcement agencies,Ã¢â‚¬Å“ Ms Granger said.
Last year the Tax Office conducted around 170 audits and reviews resulting in around $250 million in taxes and penalties.
People can make a voluntary disclosure to the Tax Office by calling 1300 132 346.