The Australian Tax Office will focus its attention on 100 wealthy Australians and businesses suspected of operating overseas shell companies suspected of concealing money in order to avoid tax.
The ATO, in conjunction with the United States and the United Kingdom, has collected over two million documents relating to thousands of people across the world, with more than 100 Australians identified.
The push is part of the ATO’s Project Wickenby crackdown, which focuses on offshore tax havens.
The ATO says the data is still being analysed, but it identified “the individuals who own the assets as well as accountants, lawyers and other professional advisors who represent them”.
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The documents have revealed complex offshore structures in Singapore, British Virgin Islands, Cayman Islands and the Cook Islands, possibly hiding tens of millions of dollars of tax money.
The ATO said yesterday it will write to the people identified in the data, asking them to explain their overseas tax arrangements.
Should people disclose the information voluntarily, under the standard voluntary disclosure concession they will be eligible for an 80% discount on their tax bill, but this is subject to penalties.
The investigation compared the money flow of thousands of people to the information they had provided to the ATO.
Tax commissioner Chris Jordan said in a statement there is nothing illegal about international structures, but offshore structures are often used for false loans, inflated tax deductions, hiding assets and other arrangement to evade tax liabilities.
“These arrangements may be perfectly legitimate or may involve tax avoidance, evasion or other serious offences by taxpayers and we need to look closely at the information we now hold,” he says.
Jordan also said accountants and advisors would be targeted.
“These advisors promote, design, implement and maintain the offshore structures on behalf of others so their role will also come under very close scrutiny,” the ATO says.
The multilateral investigation is designed so the countries can share intelligence and the US and the UK can investigate issues related to their jurisdiction.
There have already been two cases referred for criminal investigation and more than thirty audits have commenced.
The ATO alleges a Sydney company with over $20 million in offshore loans has claimed millions of dollars in false interest expenses, as information indicates the loans are a sham.
A Melbourne man who has made share transactions exceeding $25 million in value is also being investigated. The man has said the transactions were on behalf of offshore clients, but the ATO says data indicates he was the real owner.
On top of the cases already being investigated, a further 65 have been given red flags as part of Project Wickenby.
Project Wickenby began in 2006 and involves eight government agencies (including the ATO and the Australian Federal Police) with the aim of cracking down on tax evasion, avoidance and crime, particularly in the relation to secret overseas tax havens.
As a result of the operation, an arrest warrant has been issued for Philip Egglishaw, the mastermind of one of the schemes, and it saw music entrepreneur Glen Wheatley and actor Paul Hogan pursued over tax evasion.
In last year’s federal budget, the government dedicated a further $76.8 million to funding Project Wickenby.