Tax haven crackdown coming to close

The deadline for the Australian Taxation Office’s (ATO's) crackdown on foreign tax havens is fast approaching, with only one month to go before the voluntary disclosure initiative ends.

After 30 June, the ‘favourable terms’ by way of reduced penalties will no longer be available to those declaring unreported taxable income held offshore.

Tax Commissioner Michael D’Ascenzo urged taxpayers to act now: “Don’t wait for us to come to you."

“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 per cent, and we will seek criminal prosecutions in serious cases,” he said.

So far the initiative has encouraged 4,000 people to come forward, resulting in $403 million in omitted income being declared and about $73 million in liabilities raised.

The crackdown by the ATO came after it confirmed requesting information from banks enabling it to identify Australian taxpayers who have undisclosed offshore income or over-claimed deductions involving international transactions.

The ATO has 25 such tax information exchange agreements with other countries, most recently with Vanuatu and Marshall Islands.

“Through improved transparency, international co-operation 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,” D’Ascenzo said.