By Ruth Williams
INDIVIDUALS and companies who fear that their offshore tax arrangements may spark a criminal investigation have been offered an amnesty by the Australian Tax Office, ahead of what the agency warns will be an ''all bets are off'' clampdown next year on the use of tax havens to hide income.
Under the ATO's proposal, individuals or companies with undeclared offshore income - who fear they may face criminal charges if their affairs are uncovered - can approach the agency anonymously for an ''indication'' on whether they would be pursued by the ATO for a breach of criminal law. The offer, announced yesterday, ends on June 30, 2010.
''We are going to wait until June 2010 and then all bets are off and the law will apply … we think we've given people enough notice of the opportunity to come in and get their affairs cleaned up,'' Tax commissioner Michael D'Ascenzo said yesterday.
''We're trying to explain to people that the world is starting to open up in terms of transparency … there are fewer places to hide now.''
The ATO is warning that its access to previously secret information about the use of tax havens by Australians is increasing. Amid a push by OECD nations to gain access to tax haven records, Australia has so far signed information-sharing deals with nine one-time tax havens, and is negotiating another 21. Meanwhile, its Wickenby investigation into offshore tax evasion has recouped $372 million to date.
The ATO's high-profile pursuit of private equity group TPG, which last month moved $1.5 billion in proceeds from the Australian float of department store chain Myer offshore to the Cayman Islands and Luxembourg, has also clearly signalled the ATO's dislike of arrangements involving tax havens.
Since 2007, the ATO has encouraged possible tax evaders to come forward, promising reduced penalties for those who disclose their offshore income before it is uncovered by the ATO.
But the ATO hopes the new offer will convince those nervous about potential criminal charges to come forward.
The offer includes an increased ''shortfall'' penalty if the extra income declared is more than $20,000 in one year.