Taxpayers engaged in various overseas business dealings, such as owning overseas companies, trading in global shares, receiving rents, dividends, interest from foreign sources, or inheriting funds from abroad, are subject to potential audits by the Australian Taxation Office (ATO).

Australia, with its sizable expatriate population and substantial inflow of funds from overseas, is under the scrutiny of the ATO.

To preempt any tax-related issues, individuals with offshore dealings, whether personal or business-related, should ensure compliance with tax regulations before the ATO initiates a risk assessment or audit.

For those apprehensive about potential scrutiny, seeking legal tax advice is advisable. If exposure to audit risks is identified, a proactive voluntary disclosure is strongly recommended.

Advantages of Voluntary Tax Disclosure

Based on my extensive experience at the ATO, I’ve observed that individuals who proactively address tax concerns fare better compared to those who do not.

Voluntary disclosures typically have a retrospective limit of four years. An important benefit is the considerable reduction in penalties, especially if disclosure is made prior to the commencement of an audit or at its early stages, thereby saving costs for both parties involved.

Risk of Tax Audits

The ATO regularly monitors financial flows in and out of Australia. It swiftly investigates taxpayers engaged in international transactions to ensure compliance with tax obligations.

While past amnesties, like “Project DOIT,” have offered reduced penalties and amended years for offshore income disclosure, such initiatives ceased after 2014. Consequently, the ATO, particularly its offshore financial crime division, has intensified efforts to identify Australian residents with undeclared offshore income, aided by international cooperation through programs like the Common Reporting Standard (CRS).

Taking Action

At Waterhouse Tax Lawyers, we have successfully navigated numerous ATO reviews by adopting a cooperative approach. Whether it involves assisting with a tax audit or facilitating a voluntary disclosure, we ensure compliance and collaborate with the ATO to resolve tax matters efficiently.

Contact us today for assistance in safeguarding your tax affairs.