The Australian Tax Office (ATO) recently released a guide on their approach to information gathering. The quite comprehensive 53 page guide provides an insight to both the principles adopted by the ATO in exercising their powers and the considerable extent of those powers.
Australia’s Income Tax Assessment Act 1936 (ITAA 36) confers many of the relevant information gathering powers. These powers include both the power to give formal notices requiring information to be provided and formal access powers.
For example, §263 of ITAA 36 allows an authorized ATO officer to “…at all times have full and free access to all buildings, places, books, documents and other papers” and to “…make extracts from or copies of any such books, documents or papers”. Note that no warrant or court authority is required for this. Although the section does not authorize seizure of any books, documents or papers, the power to copy nevertheless provides a de facto authority to effectively ‘seize’ information.
Furthermore, the occupier of the building or place is required to provide the ATO officer “…with all reasonable facilities and assistance for the effective exercise” of the access powers.
§264 allows the ATO to issue a notice in writing to require that “any person” provide it with “…such information as the Commissioner may require”, may further require the person “to attend and give evidence”, and “may require the person to produce all books, documents and other papers whatever in the person’s custody or under the person’s control”. Additionally, the person may be required to give their evidence under a formally administered oath or affirmation.
§264A provides the ATO with the authority to issue a taxpayer with an “offshore information notice”. Such notices seek to gather information “relevant to the assessment of a taxpayer” that may be “within the knowledge of a person outside Australia”, “recorded…in a document outside Australia” or “kept… outside Australia”. If a taxpayer refuses or fails to comply with the notice, the relevant information is not admissible in any subsequent proceedings disputing the taxpayer’s assessment.
These information-gathering provisions are clearly very wide and non-compliance could involve an offence under provisions of the Taxation Administration Act 1953.
In addition to the powers conferred by §263 to §264A, the ATO relies on exchange of information arrangements for gathering offshore data. These sources include: the exchange of information articles in Australia’s 45 double tax agreements; the tax information exchange agreements with 36 former ‘tax havens’; the Multilateral Convention of Mutual Administrative Assistance on Tax Matters; the Joint International Tax Shelter Information Centre; and the Fiscal Working Party of the OECD Committee.
If you are interested, the author can provide a copy of the guide – leave a message in my Tax Boardroom.