Project DO IT: Disclose Offshore Income Today is an initiative to encourage taxpayers who have omitted to declare foreign income or capital gains, or previously over-claimed tax deductions in relation to foreign income to advise the Australian Taxation Office (ATO) ahead of a global crackdown on international tax havens. Eligible taxpayers who may be concerned about their past taxation return should consider taking advantage of the initiative so as to minimise their penalties and avoid further investigation by the ATO.
On 27 March 2014, the Australian Taxation Office announced Project DO IT: Disclose Offshore Income Today which is an initiative to allow eligible taxpayers to voluntarily come forward and make disclosures about unreported foreign income and assets, ahead of a global crackdown on international tax havens.
Project DO IT covers amounts not, or incorrectly, reported in tax returns, including:
- foreign income or a transaction with an offshore structure;
- deductions relating to foreign income that have been claimed incorrectly;
- capital gains in respect of foreign assets or Australian assets transferred offshore; and
- income from an offshore entity that is taxable in the taxpayer’s hands.
The ATO has indicated that taxpayers who disclose under Project DO IT will:
- generally only be assessed for the last 4 years and be liable for a maximum shortfall penalty of just 10%, as well as full shortfall interest charges; and
- not be investigated by the ATO or referred for criminal investigation on the basis of their disclosures.
Eligible taxpayers should lodge their disclosure statement with the ATO before 19 December 2014.