Window of opportunity opens for undeclared offshore investments
The Tax Office is giving investors a chance to voluntarily declare all income from offshore activities, otherwise penalties can include up to 90 per cent of undeclared income or prosecution.
Tax Commissioner Michael D'Ascenzo said the net is closing in on tax havens as the Tax Office's ability to trace fund flows around the world increases.
"We work closely with banks and other overseas tax jurisdictions to identify people with undeclared income - including those with highly complex and sophisticated arrangements," he said.
"For example, Australia has signed nine tax information exchange agreements with other countries and we're working on more. This complements our existing double taxation agreements with about 40 overseas jurisdictions."
The new offer, which is open until June 30, 2010, increases the shortfall penalty from 5 per cent to 10 per cent where a person's additional income from offshore activities is more than $20,000 in a tax year. Those with additional taxable income of $20,000 or less in a tax year will not have to pay a shortfall penalty for that year.
"People can now approach us anonymously for an indication of whether we would initiate an investigation to determine whether there is a potential breach of the criminal law," said D'Ascenzo. "In making this decision, we will often seek advice from an appropriately qualified panel, which will include external members. There's a much higher price to be paid later if we discover undeclared income through an audit process."
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