Fred Rollo | TaxConnections

19 Nov 2013

Too Late For 7,000 Australian Tax Haven Account Holders To Plead For Amnesty?

It may be too late for 7,000 Australian holders of accounts with the tax haven branches of Australian based banks to make voluntary disclosures of their as yet untaxed offshore tax haven interest income.

Writing in the Australian newspaper today Susannah Moran reports that as part of the Australian Tax Office’s (ATO) ongoing Project Wickenby tax evasion investigations, Australian banks have handed over “…information on a large number of people with bank accounts in offshore jurisdictions”.

The banks conceded this information following a decision of the Full Federal Court in the Read More

Written by Fred Rollo | Posted in Australia/Oceania • FATCA

12 Nov 2013

Australian Taxation Office Plans To Outsource “Tax Audits” To Big 4 Accounting Firms

The Australian Financial Review’s Fleur Anderson reported today on an internal ATO memo to staff. The memo said “We are currently exploring a new initiative for undertaking assurance work through the External Compliance Assurance Process (ECAP) project…This approach will look at how we might use the capabilities of accounting professionals, who are registered company auditors, to conduct certain assurance reviews on our behalf.”

This is an interesting development, but the report does not indicate whether the ATO would engage and pay the external auditor, or that corporate taxpayers would be expected to do so as part of their tax risk mitigation processes.

If the ATO was to engage the corporation’s existing auditor, that would raise ethical Read More

Written by Fred Rollo | Posted in Australia/Oceania • Corporate • Federal • International • Tax Controversy • Tax Policy • Tax Provision/Tax Reporting

30 Oct 2013

South African Emigre’s Offshore Tax Plan Falls Foul of Australian Tax Office’s Aggressive Audit Approach

The Australian Tax Office (“ATO”) appears to be aggressively opposing a South African emigre’s appeal against his A$21 million income tax assessments. The case of Mark Krok v Commissioner of Taxation NSD572/2013 is listed for a Directions Hearing on 7 November in Australia’s Federal Court.

A report by Susannah Moran in today’s Australian newspaper – see http://www.theaustralian.com.au/business/ato-sets-sights-on-s-african-millions/story-e6frg8zx-1226750019299 – says that “The ATO has accused Mr. Krok of tax evasion and fraud, claiming he understated his income and failed to declare capital gains made on share sales during the six years he lived in Australia.”

It is suggested that in a 5-day hiatus between leaving South Africa and arriving in Australia, Mr Krok distributed all the assets of a trust established by his father and entered into an arrangement involving a BVI company owned by a Liechtenstein Foundation.

This case will be closely watched by international tax planners and their clients, particularly since the ATO apparently sought and received relevant from the South African Revenue Service in the course of their audit investigation.

Written by Fred Rollo | Posted in Africa • Australia/Oceania • Caribbean • Individual • International • Tax Controversy • Tax Risk Management

30 Oct 2013

Australian Tax Office Proposes “Push” Returns

In a speech to the CPA Congress  in Canberra on 17 October 2013, Tax Office (“ATO”) Second Commissioner Neil Olesen outlined plans for “push” tax returns for Australian individual taxpayers as from 2014. He said:

“The ATO has substantial amounts of information about taxpayers and for those with simple returns, we estimate that on current policy settings we could initially offer a ‘push’ tax return for as many as 1.4 million people, and in fact are aiming to do so next year (2014).

The key principle here is to use the information we already routinely receive about taxpayers affairs (for example, salary and wage income, bank interest, shares and dividends) to send the tax return to the taxpayer, rather than the current way where all we offer is a pre-fill service while still requiring the taxpayer to prepare and lodge a return each year.

In Australia there are some reasons why we could not offer this service widely (eg some complex deductions) but over time and with some careful and creative thinking we think we could effectively liberate around 4.5 million taxpayers from any significant response burden at tax time.”

Interestingly, the Australian Financial Review’s Agnes King reported on 22 October 2013 “Corner store tax agents are confident the federal government’s plans to supply 1.4 million people with pre-populated electronic tax returns to which they tick “yes” or “no” will not have a material impact on business.” Read More

Written by Fred Rollo | Posted in Australia/Oceania • Individual • International

10 Oct 2013

Australian Tax Court Uses Documents Improperly Obtained In Breach Of Exchange Of Tax Information Agreement

In the Australian Federal Court on Tuesday (8 October) Justice Perram allowed the Australian Tax Office (“ATO”) to use documents obtained in apparent breach of the exchange of the Tax Information Agreement (“TIA”) between Australia and the Cayman Islands.

It appears that the Cayman Islands Tax Information Authority (“CITIA”) erroneously provided the ATO with information for tax years prior to the date set as operational for the agreement.

The Australian court’s decision has effectively validated an effective retrospective application of the Cayman’s TIA, at least in this case.

The judgement (in Hua Wang Bank Berhad v Commissioner of Taxation (No 7) [2013] FCA 1024) found that although the Caymans Grand Court had decided on 13 September 2013 that the CITIA decision on 23 February 2011 to provide the information to the ATO should be set aside and the documents should be returned; Read More

Written by Fred Rollo | Posted in Australia/Oceania • IRS • Tax Provision/Tax Reporting