The Australian Taxation Office (ATO) and federal law enforcement agencies want to intensify their campaign against offshore tax evasion, with increased penalties and greater powers for investigators expected to be considered by the federal government this year.

Generally, tax evasion occurs when people don’t report all of their income or they overstate their deductions. People do this to reduce the amount of tax they need to pay. Tax evasion is an activity commonly associated with businesses that use cash transactions, which gives them the opportunity not to declare it and pay tax on it.

People that deliberately avoid paying their fair share of tax cheat the community and disadvantage Australians who do the right thing.

In Australia, residents are subject to tax on their worldwide income. The Australian tax system protects confidentiality and privacy but allows us to verify that taxpayers are complying with the law.

Most dealings with tax havens are within the terms of the law. Unfortunately, some Australian residents try to exploit the secrecy of tax havens to conceal their assets and income and so avoid paying the amount of tax properly payable under the law.

Tax havens are countries with secretive tax or financial systems. They also have minimal or low taxes for non-residents.

The ATO has joined forces with other agencies involved with the long-running Project Wickenby, an inter-agency task force targeting offshore tax evasion, to develop a comprehensive range of procedures to combat tax evasion and increased penalties.

New anti-tax evasion procedures that are developing include:

•  improved information flows between Australian government agencies
•  better use of telecommunications interception powers;
•  widening the definition of money in relation to anti-money laundering laws;
•  improved information exchanges with foreign governments;
• strengthened international debt recovery measures and reciprocal recognition of foreign tax debts.

These defensive measures and further tax reform proposals were forecasted for submission earlier this year. The Attorney-General’s Department has stated “The finer details of these law reform proposals have not yet been put to ministers; there have been no major public announcements on this subject, and the issues are still at the very preliminary stages of policy development … Full disclosure would … run contrary to the interests of good government.

Here at The Quinn Group, our experienced team of Accountants, Tax Agents and Tax Lawyers can assist you with all of your taxation needs as well as ensuring you are compliant with all of the ATO tax requirements to ensure you comply with the tax laws but also legally minimise your tax liability. Please submit an online enquiry or call us on 1300 QUINNS (784 667) to book an appointment.