Monday, March 31, 2014
The Australian Taxation Office (ATO) has launched a new amnesty campaign to encourage taxpayers to disclose omitted income or over-claimed deductions relating to their offshore activities.
The foreign income included in 'Project DO IT' can relate to offshore accounts, financial investments, tax arrangements, and entities, such as partnerships, trusts or companies. If a voluntary disclosure is accepted, it will be treated as a voluntary amendment request.
The ATO will only assess tax for the years where the time limit for amending an assessment has not yet expired, which will typically be the last four years. The resultant tax shortfall penalty will be applied at 10 percent. If the taxpayer's additional income is AUD20,000 (USD18,477) or less in a tax year, no shortfall penalty will apply. No referral for criminal investigation will be made.
Participants will not be entitled to utilize any losses that arose in the years for which they are not being assessed. They will however be able to seek assurance regarding the ATO's treatment of repatriated offshore assets, and be able to enter into a settlement deed to obtain additional certainty, where circumstances call for additional surety.
Tax Commissioner Chris Jordan said: "Now is the time for individuals with offshore income to get their affairs in order and avoid steep penalties and the risk of criminal prosecution for tax avoidance. If you've got international tax liabilities, act now and come forward and we'll bring you back into the system with a heavily reduced penalty. If you don't declare your interest, you'll be caught and penalized."
The scheme is to end on December 19.