International tax crime

In today’s globalised world, business and finance have become increasingly cross-border. It pays to know the difference between what makes good business sense, and what is illegal.

The Australian Taxation Office (ATO) states that while most offshore dealings comply with Australian laws, “some people try to exploit secrecy provisions in other countries to conceal their assets and income and avoid their tax obligations.”

This practice is known as international tax crime.

 

What are secrecy provisions?

The Federal Court of Australia defines secrecy provisions as “those legislative provisions that impose confidentiality obligations on individuals or entities.”

In the context of international tax crime, someone may take advantage of these laws in a foreign country which dictate that business dealings be dealt with in ways that they are not transparent to outsiders such as other States, to avoid their tax obligations in Australia.

 

Who investigates international tax crime in Australia?

The ATO-led Serious Financial Crime Taskforce (SFCT) tackles international tax crime.

The multi-agency taskforce also includes the:

  • Australian Federal Police (AFP).
  • Australian Criminal Intelligence Commission (ACIC).
  • Attorney-General’s Department.
  • Australian Transaction Reports and Analysis Centre (AUSTRAC).
  • Australian Securities and Investments Commission (ASIC).
  • Commonwealth Director of Public Prosecution (CDPP).
  • Department of Home Affairs, incorporating its operational arm, the Australian Border Force.

 

International investigations and information gathering

The ATO and SFCT also work with governments and organisations around the world to fight international tax crime. Information is obtained through international treaties and information exchange agreements with over 100 jurisdictions, and from informants.

 

How is this information used?

A structured approach is taken to ensure that all wrongdoers involved in global tax evasion are identified:

  • The information gathered is used to identify professional facilitators such lawyers, financial advisors and banks.
  • Where appropriate, the Commissioner of Taxation’s formal access and information gathering powers are used to obtain information about the clients of these professionals or organisations.
  • If the ATO sees that a practitioner has a number of clients using the same methods to avoid or evade tax, they will look at their whole client base.

 

Conclusion

If you are exploiting foreign secrecy provision to avoid paying your tax obligations in Australia, it may not be as secretive as you think. The risks of getting caught are becoming significantly higher due to enhanced tools, techniques and resources to track down wrongdoers.

Nyman Gibson Miralis provides expert advice and representation in multi-jurisdictional cases that involve international tax crime, and are investigated by multiple law enforcement agencies.

Contact us if you require assistance.