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ATO amnesty offer reveals over 1000 offshore tax evaders

As part of their project DO IT, the ATO have successfully uncovered over $550 worth of assets that Australians hold offshore.

The tax office is offering a period of amnesty that allows them to come forward and reveal offshore assets without the risk of heavy penalties. The ATO will only assess four years of income for those who come forward and this will be subject to a maximum shortfall penalty of 10%. The ATO is also guaranteeing that there will be no prosecutions.

However, for taxpayers who do not reveal their offshore holdings before the mid-December deadline there may be a hefty tax bill. The full amount will be assessed as income, meaning almost half will go to the ATO. On top of that, because the assets were subject to tax evasion, the ATO may apply an additional penalty of 90%, and this can be subject to interest charges.

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What Are The Consequences Of Improperly Lodged Tax Returns?

May 4, 2021

With tax return season approaching quickly this year, you may have already started looking into lodging your income tax return. Ensuring that your details are correct and that any information about your earned income from the year is lodged is the responsibility of the taxpayer and their tax agent. However, if during this income tax return process the tax obligations of the taxpayer fail to be complied with, the Australian Taxation Office has severe penalties that they can enforce.

Australian taxation laws authorise the ATO with the ability to impose administrative penalties for failing to comply with the tax obligations that taxpayers inherently possess.

As an example, taxpayers may be liable to penalties for making false or misleading statements, failing to lodge tax returns or taking a tax position that is not reasonably arguable. False or misleading statements have different consequences if the statement given results in a shortfall amount or not. In both cases, the penalty will not be imposed if the taxpayer took reasonable care in making the statement (though they may still be subject to another penalty provision) or the statement of the taxpayer is in accordance with the ATO’s advice, published statements or general administrative practices in relation to a tax law.

The penalty base rate for statements that resulted in a shortfall amount is calculated as a percentage of the tax shortfall, or in the case of no shortfall amount, as a multiple of a penalty unit. This percentage is determined by the behaviour that led to the shortfall amount or as a multiple of a penalty unit, which are as follows:

If a statement fails to be lodged at the appropriate time, you may be liable for a penalty of 75% of the tax-related liability if:

To ensure that the statements, returns and lodgements are done correctly, and avoid the risk of potential penalties, contact us today. We’re here to help.