ATO crackdown on offshore tax evasion
Tax commissioner Michael D’Ascenzo issued a taxpayer alert yesterday warning people of the consequences of using foreign jurisdictions, such as Vanuatu, to hide income and claim false deductions.
D’Ascenzo said the Australian Taxation Office (ATO) crackdown on people using offshore ‘tax havens’ to hide income is a response to the more than $90 million in allegedly false declarations linked to Vanuatu. The ATO is conducting 80 audits in relation to the matter and will write to a further 500 Australians suspected of concealing income or assets in Vanuatu, requesting more information on their tax affairs.
“The message is simple — people should be cautious when considering the abuse of offshore structures or tax havens such as Vanuatu,” said D’Ascenzo.
“With excellent co-operation from Australia, New Zealand, Vanuatu and other international agencies under Project Wickenby, we are closing the net on people trying to use tax havens to hide income.”
D’Ascenzo said the ATO has received 661 voluntary disclosures in relation to the abuse of tax havens, but is disappointed at the low rate of response to an appeal last year to those who thought they might have tax compliance issues to come forward.
He said those who use offshore structures to hide income or assets or claim false deductions face serious penalties, including criminal prosecution.
“But people who contact us before they become the subject of an audit may be entitled to substantial reductions in shortfall penalties under our offshore voluntary disclosure initiative.”
More information on taxpayer alert 2008/8 is available on the ATO website — www.ato.gov.au/atp.
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