Earlier this year, the Commissioner of Taxation announced an initiative to allow eligible taxpayers to disclose the existence of offshore assets ahead of a global crackdown on people using international tax havens.
The initiative covers amounts not reported or incorrectly reported in tax returns, including:
- foreign income or a transaction with an offshore structure
- deductions relating to foreign income that have been claimed incorrectly
- capital gains in respect of foreign assets or Australian assets transferred offshore
- income from an offshore entity that is taxable in your hands.
This is an opportunity for all Australians who have engaged in previously unreported offshore financial activities to get their tax affairs in order. If you need to disclose international financial activities, act quickly as these benefits are only available to eligible taxpayers who come forward before 19 December 2014.
What do you need to do?
To receive the benefits of Project DO IT, you must make a truthful disclosure. This involves completing all the questions the ATO ask and lodge your disclosure statement before 19 December 2014. If you are unable to lodge your disclosure statement before then, you may contact the ATO seeking an extension.
What are the benefits?
The initiative is different to the standard voluntary disclosure process. If the ATO accepts your voluntary disclosure under this initiative, these are the benefits that will apply:
- The ATO will only assess tax for the years where the time limit for amending your return has not yet expired.
- In relation to your tax affairs, the ATO will use the information you disclose only for tax shortfall purposes (working out how much tax you should have paid). This means the ATO will not:
o form an opinion that there has been fraud or evasion
o investigate your disclosure for the purposes of prosecuting your for a criminal offence
o refer you for criminal investigation by other law enforcement agencies
o voluntarily provide your information to other law enforcement agencies
- The ATO will remit the tax shortfall penalty to 10%. If your additional income is $20,000 or less in a tax year, the ATO will remit the tax shortfall penalty in full in relation to your disclosure for that year. Shortfall interest charges will apply at normal rates.
If you wish to lodge a disclosure statement under the Project: DO IT scheme, please contact one of our accountants today on 02 9299 7044 or email us at email@example.com.