International Family Business Blog

Australian Tax Office Offshore Amnesty to be Announced

The ATO is about to announce the terms of its amnesty for individuals with undisclosed offshore income.

The terms of the amnesty are said to be reasonably generous. In simple terms, the amnesty (with a window open until December) is likely to include-

1. A 4-year cap: back-taxes will only be imposed on offshore income for the previous four years.

2. Non-disclosure penalties will be capped at 10%.

3. Minimal or nil penalties for low-level disclosures.

4. A settlement deed arrangement to obtain certainty.

5. The possibility of assurances on the taxation of repatriated assets.

More to come...

Pay your tax or get a credit rating downgrade!

According to Nassim Kadem’s article in today’s Australian Review (13 March 2014), the Australian Taxation Office (ATO) has floated the idea of having outstanding tax debts listed by the personal credit rating agencies. This would require a change to the secrecy provisions of relevant taxation statutes. 

However, in the last several decades, these provisions have been considerably watered down to accommodate information exchange between the ATO and various Australian and international government agencies. Accordingly, it might be expected that Australia’s Parliament will not be averse to the ATO suggestion.

ATO Second Commissioner Geoff Lepper was appearing before a Parliamentary hearing related to recent Privacy Act reforms. He indicated such reports would not need to indicate that the debt was for tax, but simply that it was due “to the Commonwealth as an entity”. Of course, if the law was changed, the cat is already out-of-the-bag. No “generic” label will conceal the real nature of the debt!

It seems that the ATO is of the view the threat that unpaid taxes may damage a debtor’s credit rating will encourage delinquent taxpayers to cough-up in a more timely manner. The ATO is understood to already use commercial debt-collection agencies to chase some delinquent debts.

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