Recent reports in the Australian Financial Review state that the Australian Taxation Office (ATO) has been contacting private clients of Credit Suisse in regards to what it considers suspicious transactions and secret overseas accounts.

The ATO is targeting $900m linked to 106 secret Credit Suisse accounts.

This appears to be the latest step by the ATO to clamp down on tax evasion through unreported foreign income and assets. For some time now revenue authorities worldwide have been looking into the affairs of taxpayers making use of (the so called) foreign tax havens.

The ATO data matching capabilities and information sharing arrangements with other countries is unprecedented and increasingly sophisticated in uncovering undisclosed income and assets.

We say

  • In 2008 President Obama commented on the 'infamous' Ugland House building in the Cayman Islands (either the biggest building in the world – or the biggest 'tax haven')
  • A former employee of UBS turned whistle-blower, which prompted an investigation into US citizens using Swiss bank accounts
  • USA regulators told Credit Suisse amongst other Swiss investment banks that unless they disgorged the names of US citizens with accounts they would be reviewing their banking licenses in the US
  • The Swiss banks decided to disclose names which effectively brought about an end to the 'secrecy' laws of their country (the Australian Government along with many other countries followed suit)
  • This was what heralded the collapse of many of the tax havens
  • In 2014 the ATO (realising that many of these accounts dated back to post WWII – a couple of generations) launched Project DO IT
  • It was designed to give Australians the chance to make voluntary disclosures of their offshore income and assets – it closed in December 2014
  • The terms of the amnesty offered was that the ATO would only assess on the last four years (as opposed to going indefinitely under the Commissioner's fraud/evasion powers); and cap the penalties (10% shortfall penalty); and the matter would not be referred for criminal investigation.

How can we help:

Howard Rapke and Damien Bourke have both been closely following this issue as it has unfolded. Both partners head teams at Holding Redlich experienced in dealing with these controversies and are able to bring to the table specialist regulatory and tax advice and assistance in regards to investigations of Australian nationals by the ATO (either alone) or jointly with other authorities.

Our specialist teams have the technical skills to manage the whole controversy (and deal with any associated media/publicity).

If you have any clients that may be at risk of a review or audit from the ATO (or who may be under investigation) in regards to overseas bank accounts or investments it is important that steps are taken to protect their rights (and ensure that any investigation is contained).

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.