Christopher Parkinson

The Findex Group of financial advisory businesses, including Financial Index Wealth Accountants and Centric Wealth has described the current Australian Taxation Office (ATO) Amnesty relating to offshore holdings and offshore income as the most extensive and attractive of all recent amnesties.

Taking a leaf out of the Nike playbook, the ATO has dubbed the Amnesty ‘Project DO IT’.

Senior Adviser at Findex Group, Christopher Parkinson said the ATO had implemented amnesties twice before, in 2007 and 2009, but these were very limited.

“We believe the current ATO offer is one of the world’s best amnesties and is an opportunity to get one’s affairs in order by tax-cleaning foreign wealth and then relaxing in the knowledge that everything is compliant.

“Under ‘Project DO IT’ tax-payers have the opportunity to declare previously undisclosed offshore income and offshore investments without incurring the significant financial and criminal implications that would otherwise arise.

“Project DO IT offers a limited time-window to provide correct data to the ATO, even if there is no income but there is an undeclared asset such as property. The deadline is December 19, 2014.

“This is especially ideal for anyone who said ‘No’ to the following tax return question:

During the year did you own, or have an interest in, assets located outside Australia which had a total value of A$5,000 or more?

“The key planks of ‘Project DO IT’ include limiting back taxes on offshore income to four income years and a cap on the tax shortfall penalty to 10%, compared to the standard penalty rate of up to 90%.

“Further, if any back-income is $20,000 or less, there is no shortfall penalty for that year. Interest charges at normal rates on tax owed still apply however.

“Often it takes some time to get all the relevant information together.

“We are recommending that people who think they may be eligible for this amnesty to contact their accountants or financial advisers, who can lodge an expression of interest to avoid the risk of earlier detection.

“It’s worth noting that it is still possible to negotiate time to pay any amounts owing but interest charges would still apply.

“Also, it’s important to remember there is no time limit for the ATO to review tax affairs so this is an opportunity not to be missed and December 19 is fast approaching,” Parkinson said.

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