You have 0 free articles left this month.
Register for a free account to access unlimited free content.
accountants daily logo

ATO data reveals tax avoidance red flags


One particular Caribbean island has one and a half times more Australian bank accounts held by tax residents than there are actual residents on the island, according to new ATO data that shines a light on foreign tax residents.

By Jotham Lian 12 minute read

The ATO has released its first annual report on Common Reporting Standard (CRS) statistics, which contains information on Australian financial accounts held by foreign tax residents as at 31 December 2018.

Under the CRS, banks and other financial institutions pass on financial account information on non-residents to the ATO, with the information eventually exchanged with over 65 foreign jurisdictions that have committed to the standard.

According to the ATO’s data, Montserrat, a British Overseas Territory in the Caribbean that has an estimated population of just under 5,000, has over 7,500 Australian bank accounts with a total balance of close to $340 million.


The Marshall Islands have the highest average account balance, with 71 tax residents holding Australian bank accounts with over $386 million in total.

The British Virgin Islands follow behind with 700 Australian bank accounts with a total balance of $927 million.

CPA Australia tax policy adviser Elinor Kasapidis believes the data highlights potential tax avoidance issues, particularly as tax havens such as the Cayman Islands and Bermuda show close to 5,000 residents holding Australian bank accounts totalling $2.9 billion.

“These jurisdictions are known worldwide as foreign tax havens, and there’s more included in the ATO data. This suggests that money from Australian business interests is being syphoned into low tax jurisdictions,” Ms Kasapidis told Accountants Daily.

“Operationally, having an Australian bank account as a foreign tax resident creates a pathway for an individual or business to avoid paying tax in Australia. We can’t say definitively that’s what is happening here, but it’s certainly a red flag from a tax avoidance point of view.

“We’re less concerned about the flow of money to more transparent jurisdictions, such as the one million accounts held by US and UK tax residents holding almost A$100 billion.”

In August last year, the ATO put out a warning to taxpayers to come clean with foreign income, noting that its CRS participation had given it visibility over foreign financial account information and allowed it to track those who failed to declare worldwide income.

You need to be a member to post comments. Become a member for free today!
Jotham Lian

Jotham Lian


Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

You are not authorised to post comments.

Comments will undergo moderation before they get published.

accountants daily logo Newsletter

Receive breaking news directly to your inbox each day.