The ATO has its sights set on undeclared foreign income, it now has access to financial account data from over 65 foreign countries.
The ATO’s visibility over foreign financial account information will allow it to track Australian taxpayers who are not reporting foreign income.
Account information being shared will include depository accounts, custodial accounts, debt or equity accounts, and cash value insurance and annuity contract accounts.
The data will contain details about each financial account including the account balance, interest payments, dividend payments, proceeds from the sale of assets and other income.
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. This may include income from offshore investments, employment, pensions, business and consulting, or capital gains on overseas assets.
Tax havens have become a less effective model as international agreements improve transparency. You can no longer hide money.
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.
Individuals who have not included income from assets held offshore in their tax returns have been urged to make a voluntary disclosure as soon as possible.
Contact us for more information.
Melbourne Tax Advisory
1300 942 230
48 Bertie Street, Port Melbourne
42 Villiers Street, North Melbourne