Australia’s Mooted Offshore “Amnesty” – Immunity From Prosecution Unclear

Although various tax advisers and some industry bodies have already expressed enthusiasm about the apparent generous nature of the just mooted “amnesty” for Australian tax evaders with offshore interests, there is as yet no certainty of immunity from criminal prosecution being available.

In this connection, The Australian Taxation Office (ATO) does not actually have the authority to grant immunity. Only the Commonwealth Director of Public Prosecutions (DPP) has the power to grant immunity from prosecution. Under the Australian Government’s Prosecution Policy, the DPP can give favourable consideration to refraining from prosecution under a “public interest” clause.

This writer understands the inability of the ATO to “agree” not to prosecute came to light in an Auditor General’s review some several decades ago. Apparently, an accountant had negotiated a settlement arrangement for his Tax Agent client that involved a hand-written agreement for the ATO to accept a bank cheque in full settlement of all potential audit taxes and penalties, together with a non-prosecution undertaking. The Auditor General and DPP alike were reportedly “unamused”. Thus, the ATO’s current webpage explaining the Project Wickenby processes carries the unequivocal warning that: “Only the CDPP has the power to grant immunity from prosecution…”.

Of course, the Tax Office could agree not to “refer” a matter to the DPP for prosecution, but it must be assumed the DPP would become aware of “amnesty” cases through its membership of the Project Wickenby cross agency task force. Project Wickenby is the 8 agency project “…established in 2006 to protect the integrity of Australia’s financial and regulatory systems by preventing people from promoting or participating in the abusive use of secrecy havens”.

Accordingly, in the absence of any inter-agency agreement that the mooted “amnesty” will attract immunity from prosecution, the spectre of criminal prosecution remains in the background.

It will be interesting to see how this scenario unfolds.

In accordance with Circular 230 Disclosure

Director Principal of Rollo & Company Pty Ltd, a CPA practice that specialises in Australian & international tax, estate and succession planning, professional education, negotiation and mediation, mentoring – executive coaching, and higher education consulting. We also provide the Student Ombudsman Service at Macquarie University in Sydney.

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