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‘You can no longer hide’: ATO cracks down on $100 billion in foreign income

Around 1.6 million Aussies are being told “you can no longer hide” as the tax man ramps up a major crackdown on this $100 billion area.

The Australian Taxation Office has turned its sights on more than $100 billion held in offshore bank accounts in a crackdown on undeclared foreign income.

Taxpayers who receive income from investments, family members or working overseas are being urged to report it this tax time or face hefty penalties, with new international data-sharing agreements meaning the ATO has greater power to track money across borders to identify cheats.

“This year, the ATO has received records relating to more than 1.6 million offshore accounts holding over $100 billion and is now using data-matching and sophisticated analytics to identify foreign income that has not been reported,” assistant commissioner Karen Foat said in a statement on Thursday.

Under the new Common Reporting Standard, the ATO has access to data on financial account information of foreign tax residents in more than 65 countries.

The data, which shows many Australians have financial dealings in countries like China, the UK, Switzerland, Singapore and the US, includes information on account holders, balances, interest and dividend payments, proceeds from the sale of assets and other income.

“Australians that deliberately move cash overseas in an attempt to hide it should be concerned,” Ms Foat said. “Hiding your assets and income offshore is pointless. ‘Tax havens’ are becoming a less effective model as international agreements improve transparency. You can no longer hide money behind borders.”

While it believes only a “small number” of people are deliberately avoiding tax, the ATO said it was more concerned about a “large number” who are simply unsure of their tax obligations.

“If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount may be,” Ms Foat said. “This may include income from offshore investments, employment, pensions, business and consulting or capital gains on overseas assets.”

Ms Foat added, “Whether it is rental income from your old family home, an untouched bank account earning interest or salary from working offshore, it must be reported. Even if you have paid tax on the overseas income it must be reported to the ATO, however you may be able to claim a foreign income tax offset to account for any foreign tax paid.”

From news.com.au

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