• International tax crime

    People who are Australian residents for tax purposes are taxed in Australia on their worldwide income. Most offshore dealings are legitimate and comply with Australian laws. But some people try to exploit secrecy provisions in other countries to conceal their assets and income so as to avoid their tax obligations.

    Concealment is our main concern – in particular, those schemes and arrangements that use secrecy provisions in other countries to conceal assets and income that are subject to tax in Australia. The Australian tax system protects confidentiality and privacy but allows us to verify that taxpayers are complying with the law.

    In Australia, $127.6 million has been allocated to a new cross-agency taskforce over four years.

    The new Serious Financial Crime Taskforce – which has been modelled on the success of Project Wickenby – will continue to tackle international tax evasion as one of its key priorities. By working together and sharing information we are able to bring the full power of a multi-agency approach to audits, investigations and prosecutions in order to bring criminals to justice.

    We also work with governments and organisations around the world to fight tax evasion on a global scale. International partnerships allow us to share information, staff and resources with other countries.

    On this page:

    See also:

    Achieving successful outcomes

    Project Wickenby has been instrumental in changing attitudes and behaviour towards tax evasion and offshore secrecy jurisdictions, demonstrated by lower flows of funds from Australia to secrecy jurisdictions.

    Australian courts continue to send strong deterrent messages to those involved in fraudulent behaviour. Significant sentences have been handed down recently, including one sentence of seven years imprisonment, with a non-parole period of four years for a promoter of illegal tax arrangements. The successful audit and prosecution results from the cross-agency approach have made tax evaders and promoters aware of our ability to detect these arrangements.

    Our combined local and global efforts are reducing tax evasion in the Australian tax system and further afield. Our international partners are getting similar results as part of an increased effort to tackle tax crime globally, with hundreds of people investigated and prosecuted. For those who choose to ignore the warnings, it’s clear the risks of getting caught are becoming higher.

    Consequences of illegal offshore activity

    If you participate in illegal tax dealings, the message is clear: you will be caught and we will take a hard line. We have the tools, techniques and resources to track down those who are doing the wrong thing. Those who abuse the system do so to the detriment of the Australian community and this is something we will not tolerate.

    People who promote or participate in illegal offshore arrangements run enormous risks with severe consequences, including:

    • civil sanctions
    • financial penalties of up to 75% of the shortfall for intentional disregard, with an additional 20% if conduct continues over more than one year
    • loss of career through professional deregistration or loss of licence
    • personal and professional shame among family, friends and colleagues
    • increased pressure and burden imposed on family members
    • tracing, restraining and confiscating assets under the provisions of the Proceeds of Crime Act
    • significant jail terms.

    It’s important to remember that people who take advantage of offshore secrecy arrangements often break more than one law and can be charged with each violation. While you might think your only crime is tax evasion, by making funds appear legitimate, you may also be guilty of money laundering. Money laundering in itself can carry a sentence of up to 25 years jail. With an increasing number of people being caught, we are also receiving more information about promoters.

    In this environment, promoters are more willing to share information about their clients’ offshore interests and the circle of trust that once existed between promoter and client no longer applies once someone is caught.

    See also:

    What you can do

    Talk to us

    There are advantages to coming forward and talking to us. We work with people who voluntarily disclose and want to resolve their tax issues, and significant reductions in penalties may apply to voluntary disclosures. Making a voluntary disclosure will give you certainty into the future about the tax treatment of potentially risky arrangements.

    See also:

    Report your suspicions

    If you have information about a suspected offshore secrecy arrangement, phone us on 1800 306 377. You can choose to remain anonymous.

    If you have information about suspected tax evasion phone 1800 060 062 (between 8.00am and 6.00pm weekdays), or make an online report.

    Your information could help to make the system fairer for everybody.

    See also:

    Last modified: 03 Aug 2015QC 41324