This initiative is open to those who hold or have held, either directly or indirectly, an offshore account or investment or have participated in an offshore tax arrangement that is in any way connected to a loss of Australian tax. Some taxpayers are excluded from taking up this initiative and the exclusions are detailed below.
We are increasing our focus on Australian taxpayers who may have undisclosed offshore income or over-claimed deductions involving international transactions. Our compliance activities include an increase in the number of audits we conduct.
There is nothing wrong with holding an offshore account or investing overseas as long as you pay any tax due.
Generally, under Australian tax law, a resident is subject to Australian tax on all income from inside or outside of Australia.
Eligible taxpayers who contact us before they are the subject of an audit and make a full voluntary disclosure will have access to reduced shortfall penalties.
We are asking you to review your tax returns.
If there has been an omission, the primary tax and interest will be payable. However, you can request a further reduction of any penalties or interest charged or additional time to pay based on your personal circumstances. If we are to assist you in this you will need to provide in writing the full details of the circumstances.
If you have declared all income (including capital gains) it is unlikely you have a tax liability.
However you may have a tax liability if you have:
- undisclosed income (including capital gains), or over-claimed deductions
- participated in an offshore tax arrangement, including arrangements using offshore entities such as partnerships, foundations, trusts and companies.
You may wish to contact us or an independent professional adviser to discuss your circumstances and determine whether you have a tax liability. If you want to talk to us about your potential tax liability you can ring us on our contact numbers below.
You must make a full and true disclosure of all matters material to assessing your taxation liability. Additionally you must disclose all tax liabilities including goods and services tax (GST). Your voluntary disclosure must be made in writing by completing an Offshore voluntary disclosure statement (NAT 71149). To order a printed copy of the form, note of the NAT number – NAT 71149 – and go to our Online publications ordering service, or phone 1300 720 092.
We will confirm receipt of your disclosure statement. We may also contact you to follow up or clarify issues.
You will receive a Notice of Amended Assessment for each year amended and you should pay the amended assessments by the due date. If you have difficulties meeting your payment obligations, contact us on 13 28 61 and we will work with you to develop a payment plan that takes your personal circumstances into account.
If you make an offshore voluntary disclosure and your additional taxable income is $20,000 or less in a year you will not have to pay a shortfall penalty for that year.
If the additional taxable income exceeds $20,000 you will be entitled to a reduced shortfall penalty of 5% of your additional liability.
The offshore voluntary disclosure initiative and related reduced shortfall penalty is not available to anyone who is:
- already under review by the Tax Office, including as part of Project Wickenby
- engaged in activities that exhibit a significant degree of criminality, or have been engaged in such activities
- a promoter of a tax exploitation scheme, or
- a registered tax agent or a taxpayer who receives a fee for providing tax advice.
For example, you will not be eligible if you:
- have received an intention to audit letter
- are currently under audit
- have received a notice requiring you to produce information relating to offshore income to the Tax Office or to a law enforcement agency
- have engaged in falsification of documents or transactions, or have falsified your ownership of assets, entities or structures, or
- have engaged in money laundering or other forms of criminality.
You may still make a voluntary disclosure in the circumstances above. Each case will be considered on a case-by-case basis taking individual circumstances into account.
Only the Commonwealth Director of Public Prosecutions (CDPP) has statutory authority to give immunity from prosecution. The CDPP has indicated that he will give favourable consideration to the granting of an indemnity/immunity from criminal prosecution in certain circumstances.
Ring us on 13 28 61 (within Australia) for general enquiries about offshore voluntary disclosure or to obtain a printed copy of the above publications. For complex enquiries call us on 1300 132 346.
Phone calls are confidential and you may choose to remain anonymous.
Last Modified: Tuesday, 18 September 2007
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