International Family Business Blog

Project Wickenby Tax Evasion Taskforce to be permanent?

Sid Maher of the Australian Newspaper reports (28 April 2015) that the Australian Government “...plans to permanently extend the powers behind the controversial Project Wickenby”. 

Project Wickenby is an investigatory taskforce of eight government agencies (including the Australian Taxation Office, National Crime Commission and Australian Federal Police) that has focused on arrangements considered to involve offshore tax evasion utilising what are referred to as “secrecy havens”. 

The Project has already been running for almost 9 years, raising approximately A$2 billion in additional tax liabilities, at a cost of approximately A$0.5 billion. So far, 74 people have been charged with criminal offences and Australian courts have convicted 44 (some have received severe goal terms, including for ‘money laundering').

It is understood that a large proportion of the evasion schemes targeted by Wickenby were administered and/or promoted by particular firms in the Channel Islands and Vanuatu, respectively. Such information as is available about the structure of the schemes indicates that the ‘planning’ involved was somewhat simplistic and may have relied primarily upon non-disclosure.

In the digital age, non-disclosure is not a viable alternative because governments can readily follow the money trail left when people seek to access funds ‘sheltered’ by such schemes. The Project Wickenby taskforce includes the resources of the Government’s Australian Transaction Reports and Analysis Centre (AUSTRAC), an anti-money laundering and special financial intelligence unit.

Genuine international tax and estate planning requires sophistication and probity. The client (and their advisors) need to be comfortable sitting in a courtroom and stating, “...yes, this is the way the arrangement is structured and this is why it is legitimate”.

There is no such thing as a cheap and simple international tax shelter. If a proposal looks too good to be true, it generally is!

Dodgy tax advice can get you in trouble!

We are getting closer to tax time in Australia. This means it is also the time for the purveyors of dodgy tax schemes to come out and play.

The primary anti-avoidance called Part IVA of the Income Tax Assessment Act 1936 was introduced in 1981 to counter tax schemes that were said to be artificial or contrived. However, the provisions originally legislated were actually much wider than that and they have also been tightened over several amendment cycles over the subsequent 34 years.

Part IVA’s reach has been better defined over more recent decades by various Federal and High Court decisions regarding the true ambit of the provisions. It is a very powerful weapon in the Tax Commissioner’s arsenal for the fight against tax avoidance. 

Moreover, the Crimes (Taxation Offences) Act 1980 and subsequent amendments to Part III of the Taxation Administration Act 1953 to incorporate a range of prosecutable tax crimes and quasi-crimes, have provided even more powerful weopons for the fight against tax evasion.

To help you avoid the quicksand, the Australian Taxation Office has just released a short video titled "Tax Tricks That Will Get You In Trouble”. You can view it here-

You might also like to watch the Tax Office "If it seems too good to be true, get a second opinion” video here-

Remember, getting it wrong can land you in goal!

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