ATO Grants Amnesty for Voluntary Disclosure of Offshore Income for a Limited Time Only

The Commissioner of Taxation, Chris Jordan, announced on 27 March 2014 that the Australian Tax Office (“ATO”) has launched Project Do It, a new initiative designed to encourage individuals and companies with undisclosed offshore income to come forward and clean the slate.

The Headline Features of Project Do It

The key features of Project Do It are:

  1. Voluntary disclosures must be made on or before 19 December 2014;
  2. Voluntary disclosures will be treated as an amendment request from the taxpayer;
  3. Reduced shortfall penalties will apply, namely if the additional income disclosed in a tax year is
    • $20,000 or less, then no penalties will be applied to that year of income; and
    • If the additional income disclosed in a tax year is $20,001 or more, then penalties will be applied at a rate of 10% of the tax owing, rather than up to 90%;
    • The general interest charge (GIC) will still be applied to any tax shortfalls;
    • The ATO will not investigate your affairs, or refer your affairs for investigation by another Commonwealth agency, in relation to any potential criminal offences that may have been committed in respect of past failures to disclose offshore income; and
    • The ATO will, if requested to do so, provide taxpayers with certainty in respect of the tax effect of repatriating assets held offshore, or winding up offshore structures.

 

Source: Norton & Smailes Lawyers ‘Tax Matters: News Flash March 2014’

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