20th September 2019
Over the last few years, it’s become increasingly clear that tax and compliance is getting tougher around the globe, with Australia a prime example. We’ve recently written about the government’s latest budget, which has given tax authorities vastly increased powers, and commented on reports that Australia is involved in several large investigations concerning cryptocurrency tax crime.
And, it seems that the Australian Tax Office is continuing with this tough approach. Offshore evasion is under scrutiny this time, with the assistant commissioner strongly advising individuals to correctly declare their income sources.
Ultimately, those wanting to work in this contracting hotspot, which boasts one of the most vibrant economies in the world, need to be aware of the crackdown on Australian offshore evasion.
Australian Offshore Evasion – ‘pointless’
According to the ATO, as a result of the department’s alignment with the Common Reporting Standard (CRS), and several other international initiatives, they now have unprecedented access to financial account data from more than 65 foreign jurisdictions.
This has led to assistant commissioner Karen Foat’s statement that hiding assets and income offshore is now ‘pointless’, and hints that the Tax Office has information regarding more than 1.6 million offshore accounts containing over $100 billion collectively.
Foat stated that ‘if you’re an Australian resident for tax purposes, you are taxed on your worldwide income, and so you must declare all of your foreign income no matter how small the amount may be.’ She also warned that any Australians who ‘deliberately move cash overseas in an attempt to hide it should be concerned’.
Australian offshore evasion – A long list
This isn’t the only measure that Australian authorities are taking to chase down lost revenues. The government’s latest budget significantly strengthened tax systems, putting accountants, lawyers and investment banks at the forefront of efforts to reduce avoidance and evasion.
The ATO will be targeting these individuals in order to take on wealthy families, private groups and trusts. So far, since 2016 the crackdown has been a resounding success, raising $6.9 billion in revenue from large corporate groups.
The country has also been targeting cryptocurrency as part of the J5, an international group formed to prevent tax evasion, made up of experts from Australia, Canada, the Netherlands, the United Kingdom and United States.
According to reports, the group has been extensively sharing data in order to pursue 60 investigations since its launch in 2018. The ATO is directly involved in 12 of these, and suggestions have been made that one of the investigations involves a major global financial institution and its intermediaries.
Contractors need to be aware
While Australia is a fantastic location for contractors to pursue opportunities, before you go ‘down under’, it’s important that you’re clear on tax and compliance in the country. The crackdown on Australian offshore evasion is just part of a wider global push towards tougher tax systems, and compliance cannot be ignored.
However, this shouldn’t stop you from taking advantage of the wealth of opportunities overseas. By using an expert contractor management service to provide you with compliant, transparent and streamlined tax solutions, you’ll be able to make your move overseas without any of the worry of tax or compliance on your shoulders – Contact us today.