Taxman steps up foreign pursuit
The Australian Taxation Office has stepped up investigations into Australians with Swiss bank accounts, pursuing some individual debts worth more than $100 million.
Figures obtained by The Australian also show that in the past 12 months the ATO has handed the details of more than 30,000 ¬financial accounts to the US, with details of bank accounts worth more than $5 billion provided to the Internal Revenue Service to comply with new US laws.
As part of increased intelligence sharing with Switzerland in the past year, the ATO is believed to have detected hundreds of Australians with Swiss accounts, trust funds and private companies following changes in the tax treaty with the European nation.
Since Australia’s tax treaty with Switzerland was amended at the end of 2014, the ATO has intensified its investigation into holdings in Swiss banks and other financial institutions.
Some of the debt collection cases involving Australians are worth more than $100m and the ATO has made further requests for information on Australians with money in Swiss accounts.
The ATO is also investigating at least 100 Australians with Swiss bank accounts after a new ¬tranche of leaks from a European bank was handed to Australia by a foreign government, with ATO investigators travelling to Switzerland last year. The increased focus on Switzerland and other low-tax jurisdictions follows comments by ATO commissioner Chris Jordan, who last year said Australians holding funds in low-tax or no-tax jurisdictions would be targeted following treaty changes and the introduction of common reporting standards among OECD ¬nations.
“For wealthy individuals the days of hiding money in a bank account somewhere and not being found out are very limited, because we will have this common reporting of information. It’s just a matter of time,” Mr Jordan said at the time.
“Switzerland has agreed to automatically exchange foreign resident banking information. So in 2017-18 we will expect the Swiss to automatically, annually, provide data to us on bank accounts held by Australians.”
As part of 100 data-sharing agreements in place with other countries, the ATO engaged in a total of 519 exchanges of information in 2014-15.
Australian authorities have handed over 284 “outgoing exchanges” to other countries and made 235 “incoming” requests in the past year, resulting in total tax liabilities of $255m. A new automatic sharing of bank information with the US government has seen Australia hand over details of 30,000 financial accounts of Americans and Australians worth more than $5bn to the IRS.
The bank details of Australian taxpayers were handed to the IRS under new powers of the US Foreign Account Tax Compliance Act (FATCA). The ATO is expecting to hand over similar volumes to US authorities in 2016.
FATCA was introduced under the guidance of President Barack Obama to claw back tax revenue from US citizens and companies based abroad.
FATCA has been controversial because it is unlike any other tax treaty in terms of scope and obligations. Failure to comply could see countries and companies frozen out of the US market, and about 80 countries have agreed to its implementation.
