The tax office has warned taxpayers to disclose offshore income and assets now under the 'Project Do It' initiative or expect compliance action that could lead to significant penalties.
ATO warns taxpayers to disclose now
Deputy commissioner Michael Cranston said the ATO will begin requesting information exchanges with countries such as Switzerland as soon as the initiative ends, on December 19.
With the recent ratification of the revised Australia-Swiss Treaty, the ATO has said it will seek the first information exchanges the day after Project Do It concludes.
“If you have an undisclosed bank account in Switzerland and you don’t make a disclosure under Project Do It, there is a good chance we will be requesting information about your account. If we find out about your account through our information exchanges, you will not be eligible for the terms on offer,” Mr Cranston said.
“One of the first exchanges to Switzerland relates to information provided to the ATO by an informant about a number of Australians with Swiss bank accounts. Early indications are that no disclosures have been received and the ATO will be seeking information from Switzerland, including complete bank statements, about these taxpayers."
To date, more than 2,500 taxpayers have come forward to clean up their tax affairs and get back into the Australian tax system.
"So far we’ve had 1,750 disclosures, totalling more than $240 million in additional income and $1.7 billion in offshore assets. We expect these figures to increase significantly once we receive disclosures from the additional 800 taxpayers who have come forward under Project Do It but not yet made a disclosure,” Mr Cranston said.
Switzerland is still the number one jurisdiction with nearly 600 disclosures.
The ATO recently received more than 2,000 records of Australians who have bank accounts in Vanuatu. This data is being analysed to identify previously undisclosed bank accounts.
“The message is loud and clear: taxpayers have 10 days to come forward and talk to us about their situation because we will be taking compliance action at the conclusion of Project Do It, and that could lead to audit action and significant penalties,” Mr Cranston said.
Taxpayers looking to voluntarily disclose offshore income and assets need to contact the ATO by 19 December to take advantage of the terms offered under the initiative. Taxpayers making disclosures will only be assessed for the past four years; only be liable for a maximum shortfall penalty of 10 per cent; and will not be referred for criminal investigation.
Under Project Do It, taxpayers have an opportunity to avoid steep penalties and the risk of criminal prosecution for tax avoidance.
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