‘You can no longer hide’: ATO’s new $100 billion crackdown

 

THE Australian Taxation Office has turned its sights on more than $100 billion held in offshore bank accounts in a crackdown on undeclared foreign income.

Taxpayers who receive income from investments, family members or working overseas are being urged to report it this tax time or face hefty penalties, with new international data-sharing agreements meaning the ATO has greater power to track money across borders to identify cheats.

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"This year, the ATO has received records relating to more than 1.6 million offshore accounts holding over $100 billion and is now using data-matching and sophisticated analytics to identify foreign income that has not been reported," assistant commissioner Karen Foat said in a statement on Thursday.

 

You might not even know some of your income came from overseas.
You might not even know some of your income came from overseas.

Under the new Common Reporting Standard, the ATO has access to data on financial account information of foreign tax residents in more than 65 countries.

The data, which shows many Australians have financial dealings in countries like China, the UK, Switzerland, Singapore and the US, includes information on account holders, balances, interest and dividend payments, proceeds from the sale of assets and other income.

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"Australians that deliberately move cash overseas in an attempt to hide it should be concerned," Ms Foat said.

"Hiding your assets and income offshore is pointless. 'Tax havens' are becoming a less effective model as international agreements improve transparency. You can no longer hide money behind borders."

While it believes only a "small number" of people are deliberately avoiding tax, the ATO said it was more concerned about a "large number" who are simply unsure of their tax obligations.

"If you're an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount may be," Ms Foat said. "This may include income from offshore investments, employment, pensions, business and consulting or capital gains on overseas assets."

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Ms Foat added, "Whether it is rental income from your old family home, an untouched bank account earning interest or salary from working offshore, it must be reported. Even if you have paid tax on the overseas income it must be reported to the ATO, however you may be able to claim a foreign income tax offset to account for any foreign tax paid."

The $1080 went into paying off debt instead of new spending, leaving Morrison's stimulus dead in the water.
The $1080 went into paying off debt instead of new spending, leaving Morrison's stimulus dead in the water.

$10 BILLION PAID IN REFUNDS

It comes as the ATO reveals a whopping one million more refunds have been issued compared with this time last year, with a record number of Aussies filing tax returns to get their hands on Scott Morrison's fabled $1080.

So far $10 billion has been refunded to Australian taxpayers via more than four million individual refunds, an increase of $2 billion compared with this time last year when only three million refunds had gone out.

But the ATO has urged taxpayers to be patient and avoid ringing up just to check where their refund is, saying it is working as quickly as possible and that "there is no way to speed up this process, even if you call us".

"Of course, the ATO works around the clock to quickly get refunds in people's hands," Ms Foat said. "However, there are some things that taxpayers should take care with to ensure their return is not unnecessarily delayed. Firstly, it's important to check your bank account details are correct, and if you've changed accounts recently, take a moment to update your details."

Ms Foat said when refunds were sent to incorrect bank accounts, "redirecting them to your new account will take more time". "This tax time, we've seen some people who are really keen to get their refund having missed this important step," she said.

She added that forgetting to declare income was "another big obstacle getting between some people and their return". "Common things people forget to include are rental income, bank interest and government allowances or payments - particularly if they lodged before our pre-fill was available," she said.

"If our data shows us that you've likely left out income, that can slow down the processing of your return while we make additional checks."

Higher-than-average work-related deductions can also put you under the microscope. "Our data analytics also flags instances of people making claims out of the norm for their occupation and income level," Ms Foat said.

"While we want people to claim what they are entitled to, where claims seem unusual we may do some additional checks, which could mean longer until you get your refund. So make sure you only claim what you are entitled to and keep your receipts so that you'll have them on hand quickly if we do need to see them."

frank.chung@news.com.au


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