Australia launches new offshore tax "amnesty"

December 03 2009

The Australian Tax Office (ATO) has announced a new scheme to allow some offshore tax avoiders to regularise their affairs without risking prosecution.

From now until 30 June 2010, Australians will be able to tell the ATO about their untaxed offshore assets and income, and receive in return an indication whether they are likely to be prosecuted if they now disclose it. Crucially, they can do this without revealing their identity and thus burning their boats. The previous amnesty, launched in 2007, omitted that provision and had limited take-up.

The new voluntary disclosure scheme increases the penalties on large-scale offshore tax avoiders. Individuals whose undisclosed taxable income was more than A$20,000 in a tax year will have to pay a "shortfall penalty" of 10 per cent, instead of the 5 per cent imposed in the 2007 amnesty. However, there is no penalty where untaxed income was below that threshold.

The ATO is warning that those who do not disclose their offshore affairs before the quasi-amnesty expires on 30 June will find that "all bets are off".

"For undeclared income through an audit process, penalties can be as high as 90 per cent, and we will seek prosecution in serious cases," said tax commissioner Michael D'Ascenzo. He pointed out that the ATO now has much more access to personal financial records held in other countries, under tax information exchange agreements: "The net is closing on tax havens.”

Sources:

ATO (Offshore voluntary disclosure pages)

ATO (D'Ascenzo's statement)

The Age newspaper

Sydney Morning Herald

The Australian Financial Review

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Marie Louise Pardanaud