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  • ATO steps up data mining program to target offshore tax evaders

    30 June 2014

    The Australian Taxation Office is mining data to identify individuals with undisclosed offshore income and assets.

    Deputy Commissioner Michael Cranston said the new information would be used to encourage people to disclose under Project DO IT, the ATO’s offshore disclosure initiative.

    Under Project DO IT, people disclosing their offshore assets will generally be assessed for the last four years, be liable for a maximum shortfall penalty of 10% and full shortfall interest charges, and will not be investigated by the ATO or referred for criminal investigation on the basis of their disclosures.

    “The net is closing for people who have undeclared offshore income - we’re looking at all our data and will be in touch with financial institutions, advisers and thousands of people over the coming months,” said Mr Cranston.

    “We’ll be asking some people to explain offshore transactions and suggesting that they may want to disclose under Project DO IT. At the same time, people involved in serious tax evasion may be subject to audit.”

    “As we consult with key financial institutions, tax advisers and accounting firms, they may get in touch with their clients to let them know it’s time to get their affairs in order and disclose under Project Do It."

    The ATO will significant increase its compliance focus by examining data including: information from overseas tax authorities on Australians with offshore investments and bank accounts; information from Australian and foreign banks on fund flows, interest and account balances; information from informants about offshore accounts, and money transfers to and from offshore bank accounts.

    To date, the ATO’s Project DO IT initiative has received significant interest with166 disclosures raising an additional $13 million in tax liabilities. There have been more than 250 expressions of interest, where taxpayers have identified themselves and said they will be making a disclosure. There have also been more than 600 general enquiries.

    “We expect a large number of disclosures towards the end of the initiative as taxpayers get their affairs in order. Most people getting in touch with us are reporting accounts in Switzerland, Israel, Lichtenstein, the Netherlands, South Africa and Hong Kong, so we’ll obviously be looking closely at flow of funds to those countries,” Mr Cranston said.

    “This really is a last opportunity for people to get their affairs in order.”

    Project DO IT closes on 19 December 2014.

    Last modified: 06 Mar 2015QC 40999