International offshore business dealings? Undeclared taxable income? Make a voluntary tax disclosure now
Taxpayers who own an overseas company, trade in international shares, receive rents, dividends and interest from overseas interests, receive inheritance funds from overseas and managed overseas companies from Australia are all at risk of having their international business dealings audited by the ATO.
Australia has a large migrating population that has either left wealth overseas or have families still residing overseas. Flows of funds to Australia is a focus for the ATO.
If you have offshore dealings, business or private, you should make sure everything is okay from a tax perspective before the ATO undertake a risk review or audit.
If you are concerned that this is a possibility, seek tax legal advice and, if you are exposed, we strongly recommend making a voluntary disclosure as soon as possible.
Advantages of a voluntary tax disclosure
During my many years working in the ATO I learned that people that who come forward with a tax problem are far better off than those that don’t.
Depending on the issue, voluntary disclosures are generally limited to 4 years.
One of the biggest advantages of a voluntary disclosure is that penalties are significantly reduced if you come forward before the notification of a review or in the very early stages of a review. This is because it saves both parties significant costs in managing the process.
Risk of undergoing a tax audit
The ATO tracks financial flows of funds in and out of Australia on a regular basis. Like an eagle, the ATO will swoop on taxpayers with international dealings to get satisfactory explanations and ensure their tax obligations are met.
In the past, the ATO has had a number of amnesties for people to disclose their offshore income for reduced penalties and reduced number of amended years. However the last one, “Project DOIT” finished in 2014.
Since then the ATO, especially their offshore financial crime area, has been vigilant in finding Australian residents with offshore interests and potentially undeclared income. The world is a smaller place with countries sharing financial information with each other through an international program called the Common Reporting Standard (CRS).
At Waterhouse Tax Lawyers I have been involved in many ATO reviews of clients and dealt with the ATO on a cooperative basis. As a result of this style of negotiation we have gained excellent outcomes for our clients.
Whether it is helping with a tax audit or making a voluntary disclosure on your behalf we can help you get this right and work with the ATO to give you comfort about your tax affairs.
Give us a call.