Project DO IT is an opportunity for taxpayers that have been involved previously in unreported offshore financial activities time to get their taxation affairs in order.
Increased international collaboration will mean the “net” is quickly closing on tax evasion around the globe. In recent times, the sharing of information between countries has improved significantly. Banking data is exchanged regularly and the G20 is aiming for global tax transparency. Even countries historically thought as being tax havens, like Cayman Islands and Switzerland are working together with the tax authorities world wide to increase global financial transparency. Under this initiative, taxpayers have an opportunity where they can avoid steep penalties and the possibility of criminal prosecution for avoiding tax. The benefits are only available for eligible Australian taxpayers who disclose this information and come forward before 19 Dec 2014.
Project DO IT allows eligible taxpayers to come forward and voluntarily disclose unreported foreign income and assets. The initiative will cover the amounts that were incorrectly or not reported on tax returns, and include:
- offshore structure transactions or foreign income
- incorrectly claimed deductions that relate to foreign income
- capital gains relating to Australian assets transferred offshore or foreign assets
- income from offshore entities that is taxable in the hand
- Offshore deductions that relate to domestic income.
The ATO has reassured taxpayers that disclosing under Project DO IT will not mark them with a “red flag”. The ATO said feedback had raised taxpayer concerns that if they disclose they will be “red-flagged” for future investigation. Deputy Commissioner Michael Cranston said this was not the case and that the ATO was far more concerned with the taxpayers who don’t disclose, rather than those who do.
Contact Solve Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.
