On 27 March 2014, the Commissioner of Taxation announced an initiative to allow eligible taxpayers to come forward and voluntarily disclose unreported foreign income and assets. He urged taxpayers with offshore assets to declare their interests ahead of a global crackdown on people using international tax havens.
The initiative covers amounts not reported or incorrectly reported in tax returns, including:
- foreign income or a transaction with an offshore structure
- deductions relating to foreign income that have been claimed incorrectly
- capital gains in respect of foreign assets or Australian assets transferred offshore
- income from an offshore entity that is taxable in your hands.
This is an opportunity for all Australians who have engaged in previously unreported offshore financial activities to get their tax affairs in order. Increased international cooperation means the net is closing in on tax evaders around the world. In recent years, information sharing between countries has increased significantly. Banking data is being exchanged routinely and automatically and the G20 is promoting global tax transparency.
Even countries previously thought of as tax havens, such as Switzerland and the Cayman Islands, are working with tax authorities around the world to increase financial transparency.
Taxpayers are eligible to make a disclosure under this initiative as long as they are not specifically excluded from doing so.
Taxpayers who need to disclose international financial activities are urged to act quickly and decisively as the voluntary disclosure period ends on 19 December 2014. If the ATO detect the offshore activity first you will be exposed to the full force of the law, including severe penalties.
If you own or have an interest in any offshore assets or investments that you have not previously fully disclosed to the ATO and would like to participate in the voluntary disclosure amnesty please contact your LBW Principal at your earliest opportunity.