A recent decision in the AAT shows the importance of having your paperwork in order if you bring money in from offshore.

The taxpayer has the burden of proving that any tax assessment is excessive. The cards are stacked against the taxpayer should the Commissioner issue a default or amended assessment.

In this case a Chinese citizen became an Australian resident. He reported his income in Australia but no income from offshore. Austrac picked up money transfers from China to Australia. The Commissioner made enquiry of the taxpayer who said the monies were savings from China and from profits from a joint venture prior to his becoming an Australian resident. However he could not prove this to be the case to the satisfaction of the Commissioner. The Commissioner issued amended assessments to include the monies which were transferred from China in his assessable income.

The AAT found that because of the complete absence of documents evidencing the claimed savings in China and the complete absence of any reference to them in the visa application meant that the taxpayer did not satisfy the burden of proof.