Using our domestic powers
Although we have specific powers to gather information and documents from offshore jurisdictions, we can also use our domestic notice and access powers in certain situations.
We can use our domestic notice powers if an entity in Australia has custody or control of documents located offshore. These powers require the entity in Australia to obtain the documents from offshore and give them to us.
The following examples explain our approach to gathering information where an entity in Australia has custody or control of documents located offshore.
Example – Custody and control of offshore documents
Australia Bank Ltd is a bank listed on the Australian Securities Exchange. The bank operates a business in Australia and has central management and control situated in Australia. Australia Bank Ltd has a branch in New York City.
Australia Bank Ltd has custody and control of the documents and information in respect of the branch located in New York – this is because a branch located offshore is not a separate legal entity.
End of example
Example – Control of offshore documents
Harrinder is an Australian resident taxpayer living in Sydney. Harrinder has a safe deposit box with a bank in Liechtenstein, where she keeps financial statements and documents in respect of her offshore assets.
In this situation, the safe deposit box is under the control of Harrinder. She can obtain the contents of the box by making a request to the bank. We can issue a formal notice to Harrinder requiring details of the contents of the safe deposit box.
End of example
Example – Control of information about foreign bank accounts
We issue a notice under section 353-10 of Schedule 1 to the TAA 1953 to a bank in Australia requiring details of foreign bank accounts held in the bank’s digital database in Australia.
The bank must comply as the notice was issued for the proper purpose of ascertaining whether persons may have an Australian tax liability. The notice is not limited to information directly relating to Australian taxpayers.
End of exampleThe example above relating to control of information about foreign bank accounts is based on the decision in Australia and New Zealand Banking Group Limited v. Konza & Anor [2012] FCAFC 127.
Banking transparency
In recent years, we have increased the number of information requests made to banks in order to help identify undisclosed foreign-sourced income evident in bank transactions.
The validity of our formal notices is not inhibited by any foreign law that purports to prohibit the disclosure of information in Australia to us, provided the notice is issued for the purposes of the tax laws.