In recent years, the ATO has become more sophisticated in sharing information with overseas jurisdictions. Operating until 19 December 2014, the ATO is encouraging people to voluntarily disclose any income and assets hidden offshore in return for significantly lighter penalties under Project DO IT: Disclose Offshore Income Today.
Are You Eligible for Project DO IT?
Taxpayers eligible for Project DO IT are those who have previously omitted foreign sourced income or capital gains, or taxpayers who have previously over-claimed deductions. A taxpayer who has recently lodges a voluntary disclosure outside of Project DO IT process may still be eligible to participate in the initiative in circumstances where amended assessments have not yet been issued and there has been no finding of fraud or evasion.
Taxpayers who are already under audit, are involved in the objection stage or litigation relating to omitted offshore income, capital gains or over-claimed deductions are not eligible for Project DO IT.
There are numerous benefits for a taxpayer in making an offshore voluntary disclosure under Project DO IT:
• The taxpayer will only be assessed for years that fall within the time limit for the Commissioner amending an assessment (generally four years) compared with the normal rules which allow for unlimited years of review for fraud or evasion;
• The shortfall penalty will be capped at 10 per cent compared to the normal rules which can impose penalties in a range of up to 75 per cent;
• The ATO will agree not to investigate the disclosure for the purposes of criminal prosecutions, not refer the disclosure to any other law enforcement agency ( however this will not apply to promoters of tax evasion schemes);
• For taxpayers to wind up offshore structures and repatriate their offshore assets to Australia, the ATO will provide certainty on the appropriate tax treatment of these transactions.
Quinn Lawyers has vast experience in dealing with the ATO and preparing voluntary disclosures. Given the advantages of Project DO IT, if you have undisclosed offshore assets and income it’s seriously worth considering voluntary disclosing the information before it is discovered by the ATO. For advice on voluntary disclosures or to make a voluntary disclosure to the ATO contact us today on 02 9223 9166 or visit www.quinns.com.au to make an online enquiry.