The time to declare is running out – Act Now! These benefits are available only to eligible taxpayers who come forward by 19 December 2014.
Taxpayers with undeclared offshore assets or income are running out of time and need to act now if they want to take advantage of the rare opportunity provided by the ATO’s offshore voluntary disclosure initiative, Project DO IT (Disclose Offshore Income Today).
With a cut-off date of 19 December 2014 Project DO IT is an initiative unlikely to be repeated by the ATO. They are saying that ’you need to come forward now’ if you could potentially benefit from Project DO IT. Project DO IT allows eligible taxpayers to come forward and voluntarily disclose unreported foreign income and assets.
Announced in March 2014 by the Commissioner, the Project DO IT initiative covers amounts not reported or incorrectly reported in 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
- Offshore deductions relating to domestic income.
Project DO IT offers the most generous terms ever announced by the ATO for making a voluntary tax disclosure. The key points are:
- Tax is only assessed for the past four assessments regardless of the number of years of non-disclosure.
- Penalties are 10%, or nil if the additional income in a year is $20,000 or less.
- The ATO will not refer you for investigation for criminal prosecutions.
- The ATO will not voluntarily refer the disclosure to any other law enforcement agency.
- Assurance and certainty can be given on the tax effects of winding up offshore structures and bringing offshore assets back to Australia.
- Only certain financial information needs to be provided.
- There is an efficient disclosure process with no obligation to meet the ATO.
- The Deadline for making the disclosure is 19 December 2014.
With the increased global exchange of financial information it is almost certain that taxpayers doing the wrong thing with their international assets will be caught.
If undeclared overseas assets or income are detected before taxpayers put their hand up, then they are ineligible for Project DO IT.
Increased international cooperation means the net is closing in on tax evaders around the world. In recent years, information sharing between countries has increased significantly. Banking data is being exchanged routinely and automatically and the G20 is promoting global tax transparency. Even countries previously thought of as tax havens, such as Switzerland and the Cayman Islands, are working with tax authorities around the world to increase financial transparency.
Taxpayers are eligible to make a disclosure under this initiative as long as they are not specifically excluded from doing so. If you need to disclose international financial activities, act quickly and decisively. If the ATO detect you first you will be exposed to the full force of the law, including severe penalties.
Please contact Optima Partners if you feel Project DO IT effects you.
