Project DO IT – Amnesty for overseas income By William Buck on 03/04/14 - Mins to read: 2 minutes The Australian Tax Office (ATO) has announced an initiative whereby Australians with unreported offshore assets can declare their interests and receive concessional tax treatment. The Offshore Voluntary Disclosure Initiative provides an opportunity for those who haven’t declared their overseas assets and income to do so. The initiative, known as “Project DO IT: disclose offshore income”, will be available until 19 December 2014. Eligible taxpayers who make disclosures of offshore assets and income will generally only be assessed on the last four income years. A concessional shortfall penalty of 10% plus interest charges will be applied. Low dollar value disclosures(less than $20,000 income in a particular year) will attract no penalties. Importantly, taxpayers will not be investigated or referred for criminal investigation by the ATO on the basis of their disclosures under Project DO IT. This treatment represents a significant concession relative to the tax treatment that could apply if the undisclosed income, gains or assets were identified by the ATO in the course of an audit. In recent years there has been a clear global push towards greater transparency, the closing of loopholes and entering into new agreements with previously secretive nations. The Australian government now has very effective exchange arrangements with “tax haven” or “secrecy haven” countries such as the British Virgin Islands, Bermuda and Switzerland. As a consequence, the information that that ATO can obtain on offshore income and assets is becoming more and more comprehensive. What action should I take? William Buck recommends that anyone with overseas assets or liabilities should review their tax affairs. It is important to appreciate that an Australian resident taxpayer is taxable in Australia on their worldwide income. Many people will find that their affairs are in order and no action under Project DO IT is required. Areas where we expect that undisclosed income, gains and assets will exist include: offshore bank accounts (including debit and credit card arrangements) income received by or diverted to offshore structures investment such a real property or shares held overseas controlled foreign companies, trusts and other structures where the Australian taxation consequences have not previously been considered. Before you make a disclosure (or determine that a disclosure is not required) you need to ensure you correctly understand how your overseas income and assets should be treated under the Australian tax law. William Buck’s team can confidentially assist you in understanding and making use of the voluntary disclosure initiative. Our tax specialists have extensive experience in dealing with the ATO and can liaise with the ProjectDOIT officers on your behalf to ensure a smooth resolution. Our membership in Praxity, the world’s 8 largest accounting alliance gives us access to experienced experts across the globe with first hand understanding of the financial reporting, legislative and disclosure requirements in their jurisdictions. Our tax team also provides advice and support for other advisors to develop the most appropriate solutions for their clients.