The Australian Taxation Office (ATO) has undertaken its first ever automatic sharing of bank information with the United States (US) Internal Revenue Service (IRS).
Details of over 30,000 financial accounts worth over $5 billion are being provided to the US under the new powers of the US Foreign Account Tax Compliance Act (FATCA).
The information provided on US citizens and tax residents with Australian bank accounts is the first step in a wave of transparency measures being implemented globally by Governments and tax administrations. Beginning in 2017, close to 100 countries will be sharing non-resident data under the OECD Common Reporting Standard (CRS).
In return the ATO will receive data from the IRS about Australians with financial accounts in the US and will use that data to detect cases of undeclared offshore income and tax evasion.
Automatic exchange of financial account information is the new international standard to eliminate tax evasion. The ATO is committed to ensuring that taxpayers are disclosing their offshore income and in 2017 will implement the CRS, under which it will exchange financial account information with almost 100 countries.
The new transparency initiatives further strengthen Australia’s existing network of international treaties and information exchange agreements with over 100 jurisdictions. During 2014-15 the ATO engaged in 519 exchanges of information resulting in total tax liabilities of $255 million (up from $250 million in 2013-14).
Do You Have Undeclared Income from an Australian Bank?
Who Is Handing Over Names to the IRS?
Original Post By: Ronald Marini