News

Tax office amnesty on foreign income declarations

On 27 March 2014, the Commissioner of Taxation announced ‘Project DO IT’, an initiative within the Australian Taxation Office (ATO) to allow eligible taxpayers to come forward and voluntarily disclose unreported foreign income and assets.  From the ATO’s website, this initiative covers amounts not reported, or reported incorrectly, in income 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.

(see, https://www.ato.gov.au/)

Among the benefits to those who choose to take up the amnesty, the ATO has said taxpayers have an opportunity to avoid steep penalties and the risk of possible criminal prosecution for tax avoidance.

This amnesty is only available to eligible taxpayers who come forward to the ATO before 19 December 2014.

‘Project DO IT’ does provide an opportunity for taxpayers to deal with outstanding tax issues involving foreign income in a measured and controlled way.  It is always our view that clients are better to seek resolution of outstanding issues in dispute with the ATO as soon as possible.  Depending upon your circumstances, there is always a place for voluntary disclosure however professional advice should always be sought to mitigate and minimise (as much as possible) any exposure.

Give our office a call if you require any assistance.

Tags: tax law