The ATO has announced ‘Project DO IT’, under which they are offering a 'last chance' for taxpayers to disclose offshore income.
The ATO now has increasing access to information from foreign governments and finance institutions, including information previously considered to be safe from review in ‘tax havens’. This means that the risks of Australian residents with overseas assets and income being detected by the ATO are much greater than in the past.
As part of the amnesty, the ATO has offered to:
- reduce penalties to a maximum of 10% of any income tax shortfall;
- only assess undeclared income for the last four assessment years; and
- not proceed with criminal prosecutions.
Any disclosure must be made by 19 December 2014. We expect that, after this deadline, the ATO will proceed with aggressive audit and prosecution activity.
The ATO is also offering some concessions for taxpayers who wind up their offshore structures. This may present an opportunity for individuals who are considering bringing assets back to Australia.
You should seek advice before approaching the ATO to ensure the disclosure meets the requirements that must be satisfied to get the protection of the amnesty and to clarify the consequences of any disclosure under the program, as these consequences will depend on each individual’s circumstances.