Australians confess to stashing $1b in assets offshore

Around $180 million in undeclared offshore income has now been recovered as part of the amnesty, the ATO said. A further $1 billion in assets has also been recovered. Photo: Louie Douvis

The Tax Office is keeping a close eye on foreign banks as part of its push to stop money being sent offshore by wealthy individuals.

It comes as Australians flock to declare money in hidden accounts, under an amnesty from criminal convictions running until December.

Around $180 million in undeclared offshore income has now been recovered as part of the amnesty, the ATO said. A further $1 billion in assets has also been recovered.

ATO assistant commissioner David Allen said Australians were realising that international tax loopholes were closing, with Switzerland now pledging to sign up to the OECD’s automatic information sharing agreement.

“What we’ll see in a couple of years is the Swiss will be providing to Australia details of Australians’ bank accounts in Switzerland.” Mr Allen said.

“This is really starting to snowball and reinforce the message that there are no more tax havens.”

Around half of the disclosures relate to accounts in Switzerland. Other popular destinations for hiding money overseas were Israel, Liechtenstein, Hong Kong and the UK, the ATO said.

In one disclosure alone, $30 million was declared in a hidden account in Liechtenstein, as well as $118 million in hidden assets.

Mr Allen said the ATO was monitoring foreign banks as part of its work in the area following a series of high-profile tax avoidance facilitation cases in the US and Europe.

“We monitor closely, not just the US but there’s a lot of other activity happening with foreign banks in Europe as well,” he said.

In May, Swiss banking giant Credit Suisse was hit with a record $US2.6 billion fine for helping Americans hide money in secret bank accounts in Switzerland.

The case revealed an elaborate scheme involving a private elevator for clients to access their accounts at the Zurich airport.

ATO assistant commissioner David Allen said he could not rule out the banks operating similar facilitation schemes for Australians, but that it was watching them, including Credit Suisse, closely.

“We’ve got a full idea what they [Credit Suisse] have been doing in the US. We’ve obviously been doing our own analysis and continuing our engagement with a range of foreign banks,” he said.

“The writing’s on the wall for how some of these banks may have behaved in the past.”

The ATO has been criticised for allowing deliberate tax evaders to escape proper punishment under the law.

People who come forward under the arrangement willavoid harsh penalties and are only assessed for the last four years. They are only liable for a maximum shortfall penalty of 10 per cent, and will not be referred for criminal investigation.