Newsletter
June Newsletter
Tax amnesty for undeclared offshore income
The ATO has launched a voluntary disclosure initiative known as "Project DO IT: disclose offshore income today". The Tax Commissioner, Chris Jordan, has warned that the initiative is a last chance opportunity for individuals who have not declared their overseas assets and income to come back into the tax system before 19 December 2014 in order to avoid steep penalties and the risk of criminal prosecution for tax avoidance.
The Commissioner says eligible individuals who make disclosures will only be assessed for applicable periods of review (generally only the last four years). A shortfall penalty of 10% (plus interest) will apply for these disclosures, although low-level disclosures will attract minimal or no penalties.
Individuals will also be able to obtain additional certainty (where circumstances call for additional surety) and seek assurance regarding the ATO's tax treatment of repatriated offshore assets. In addition, Commissioner Jordan says individuals will not be investigated or referred for criminal investigation by the ATO on the basis of their disclosures under Project DO IT.
TIP: The ATO notes that in order to receive the benefits of Project DO IT, individuals must make a "truthful disclosure" and lodge their disclosure statement before 19 December 2014. The ATO further notes that until the individual lodges the statement, the ATO’s normal compliance activities will continue – if the taxpayer is detected first, they will not be able to benefit from the initiative.