23 Jul 08 ATO submission to US Senate Committee on Homeland Security and Governmental AffairsThe ATO has provided a submission to the US Senate Committee on Homeland Security and Governmental Affairs for a hearing into tax haven banks and US tax compliance conducted by their Permanent Subcommittee on Investigations held on 17 July 2008.
In the submission, the ATO notes that the flow of funds through tax havens is increasing. In the fiscal year ending 30 June 2007, about $16 billion was sent directly to tax havens from Australia, and approximately $18 billion was sent directly from tax havens to Australia. However, the ATO also says:
"We also know from our risk assessment activities that a significant part of the flow of funds to and from tax havens is not abusive. These amounts may relate to tourism or travel, or legitimate business in goods or services. Another aspect of these funds relates to havens as “hubs” for certain financial transactions like insurance, private equity or hedge funding. These financial transactions may not give rise to tax risk other than in terms of tax competition."
For a copy of the full submission, go here