Hidden Money in the Foreign Bank Account? No Longer Safe!
Foreign Bank Account Being Targeted By the ATO
Historically, if you have money in the foreign bank account, it was regarded as a safe haven. Now things are changing. This is the first time that the ATO has been given access to information on Swiss bank accounts, which is a noted tax haven.
Australians who have ownership of a Swiss bank account have had their information provided to the Australian Taxation Office under a sharing agreement. Deputy Commissioner Jeremy Hirschhorn has recently stated that the ATO intends to data match this information with relevant income tax returns for applicable income years.
Further action
It is advisable that individuals who may be affected by these revelations are contacted to make sure that their affairs are in order. In particular, whether the individuals themselves are fully aware of what they have invested in, and whether any overseas distributions need to be declared.
In situations where yearly Australian taxation obligations are unknown on a particular investment, the following actions are advisable:
• Request the ATO to make a decision on whether the earnings are assessable in Australia via a private ruling application.
• Obtain further evidence of the nature of the investment, and how earnings are taxed, via experts and intermediaries. On some occasions, a certified or notarised translation into English may be necessary.
• Making a voluntary disclosure to the ATO, which in turn may be effective in having any potential penalties reduced.
While this announcement only relates to Swiss investments, recent statements suggest it is part of a wider program to uncover international investment arrangements. It can only be assumed that more information sharing agreements will be made in the future, where the other country involved has a noted history of being a tax haven.
If you require any advice from one of our expert advisers, please contact our office.
Source: CCH iQ (January 2019)
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