22 Mar 12 Non disclosure of foreign source income by Australian tax residents - TA 2012/1
On 21 March 2012, the ATO issued Taxpayer Alert TA 2012/1 entitled "Non disclosure of foreign source income by Australian tax residents".
The Taxpayer Alert describes arrangements under which Australian resident taxpayers who have derived income or other taxable amounts from foreign sources do not correctly include these amounts in their assessable income for Australian tax purposes. The ATO is continuing to review these arrangements.
In media release No 2012/06, issued 21 March 2012, the Commissioner, Michael D'Ascenzo, advised that the ATO will be focussing on undeclared foreign source income, as outlined in the taxpayer alert.
Mr D'Ascenzo said the ATO is concerned that not all taxpayers are disclosing their taxable offshore income such as foreign investment income or income earned from inherited assets.
The ATO is undertaking a range of compliance strategies to address risks relating to non disclosure of offshore income, including requesting information from banks and enhanced data matching with overseas revenue agencies, AUSTRAC and other government agencies.
Mr D'Ascenzo said Australian tax residents need to be aware of their tax obligations and those who fail to declare their offshore income may incur penalties of up to 75% of the tax avoided.
"Penalties will be reduced by 80% if the person makes a full voluntary disclosure to the ATO", Mr D'Ascenzo said.