Turning up the heat on tax havens

• Published in: Intheblack Vol. 78; no. 1; p. 66
• Main Author: Granger, Jennie
• Format: Trade Publication Article
• Language: English
• Published: Melbourne CPA Australia 01.02.2008
• Subjects: Compliance; Disclosure; Fines & penalties; Income taxes; Offshore banking; Offshore investing; Personal income; Tax havens; Tax treaties; Australia
• ISSN: 1832-0899

Last financial year round $5.1 billion left Australian shores for tax havens. There is nothing wrong with holding an offshore account or investing overseas, as long as you pay any Australian tax due. Many tax havens are major financial centers and they recognize there are legitimate reasons for transacting with them. Operating in a global economy means an increasing proportion of Australian business, investment and employment is derived from international dealings. As many as 40% of their exporters are small businesses and about one million Australians work overseas. However, the Tax Office is concerned some Australians don't understand -- or choose not to comply with -- tax laws relating to financial dealings with tax haven countries. Australia has made a number of breakthroughs in detecting, investigating and dealing with abusive tax haven arrangements -- in fact, tax administrations around the world are continually improving how they deal with compliance issues surrounding tax havens.