Hiding places for tax evaders becoming scarce

Our ability to detect arrangements involving secrecy jurisdictions continues to gain strength. Information-sharing and data-matching processes initiated by Project Wickenby are now firmly established in a range of Australian Government agencies, so places for tax evaders to hide are disappearing fast.

'With reforms to legislation and administrative practices, increasing progression of case work and new sources of intelligence, the ATO and our partner agencies have all bases covered,' Commissioner of Taxation Michael D'Ascenzo said.

This year, the focus is moving towards private wealth and trust arrangements. For the first time, we are applying our risk differentiation framework to small-to-medium enterprises and highly wealthy individuals to more accurately target individuals who demonstrate risky behaviour.

We work closely with AUSTRAC, banking organisations and overseas tax administrations to improve our ability to trace fund flows around the world and to identify Australians with income and assets hidden offshore. Our sophisticated computer tools, thanks to an $800 million upgrade, can now uncover complex arrangements that were previously difficult to find.

At the G20 in Mexico earlier this year, world leaders reiterated their commitment to strengthen transparency and the exchange of information for tax purposes. They urged all countries to fully comply with the global forum's standard on transparency and the exchange of information, and implement the recommendations identified in the course of the forum's reviews. Leaders also strongly encouraged all jurisdictions to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Australia has an extensive network of double tax treaties and information agreements encompassing a total of 77 partner jurisdictions. We have now signed 33 tax information exchange agreements - many with former tax secrecy jurisdictions. We are recognised internationally as an advocate for global tax transparency, and set a strong example by exchanging information under our treaties.

Already the information gained from agreements has led to substantial adjustments. For example, information provided by the Cayman Islands resulted in an adjustment to an assessment in the 2010-11 year of $36.3 million. In the 2010-11 financial year, we used information provided by the British Virgin Islands to issue an amendment worth $6.6 million.

Project Wickenby results at a glance

Recently an individual was sentenced to almost nine years jail as a result of Project Wickenby investigations.

This is the longest sentence to date for a Project Wickenby case and is a significant result for the taskforce.

The individual was a ringleader in a multi-million dollar tax fraud scheme, and will not be eligible for parole until March 2019.

This prosecution is a firm example to promoters and participants involved in abusive offshore arrangements that we are committed to detecting these arrangements and holding people to account for their actions.

At 30 June 2012:
  • more than $1.361 billion raised in tax liabilities
  • 3,104 audits and reviews completed
  • 67 people charged
  • 26 people convicted.
    Last modified: 22 Nov 2012QC 28311