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Scores of rich Australians dodging taxes, ATO says

The ATO will look into cash movements.

The ATO will look into cash movements. Photo: Gabriele Charotte

More than 100 wealthy Australians, some of them high-profile, have netted tens of millions of dollars in ill-gotten gains through newly discovered links to a worldwide network of tax havens, the Tax Office claims.

ATO deputy commissioner of serious non-compliance Greg Williams said two Australians were under criminal investigation, while 65 others had been identified as ''high risk'' because they had each moved more than $1 million in or out of Australia without declaring the money in their tax returns.

The swoop is based on a database - obtained through the ATO's international information exchange network - of more than 2 million documents that show how thousands of people around the world use shell companies and trusts in tax havens Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands.

Mr Williams said he expected the number of Australians caught up in the probe to grow as the ATO swaps intelligence with its US and British counterparts.

''The message I've been putting out in recent times is that you think you can be clever and hide and that you are invisible in this particular system because you're dealing in some kind of offshore arrangement,'' Mr Williams said.

''The reality is that we are starting to see this and we can see you.''

After sifting through the data, the ATO is investigating a company in Sydney that has claimed millions of dollars in tax deductions for interest expenses on offshore borrowings. The ATO claims the loans are a sham because the offshore lender is actually controlled by the Australian company.

It has also launched an audit of a Melbourne man who claimed more than $25 million in share deals were carried out for offshore clients. The ATO believes the man was the real owner of the shares.

The ATO's database appears to be the same as one held by former Fairfax Media journalist Gerard Ryle's International Consortium of Investigative Journalists, which has published a series of reports linking secret offshore structures to individuals including a member of the Philippines Marcos dynasty, the Deputy Speaker of the Mongolian parliament and Brigitte Bardot's former playboy husband.

It is believed the data is a complex mix of spreadsheets, emails and other documents that required sophisticated software to analyse.

''It's our ability to then link that with Austrac [the government agency that tracks international money flows] data that really paints a full picture,'' ATO assistant commissioner for economic crime Paul Cheetham said.

Mr Williams declined to detail how the ATO gained access to the database but said it was obtained within the past 18 months and did not come from the ICIJ.

The ATO also has access to thousands of client records stolen by a former employee of Liechtenstein Group Trust, the wealth management arm of the European tax haven's royal family.

On Tuesday, Fairfax Media revealed that 70 Australians with income of more than $1 million a year paid no tax in the 2010-11 financial year.

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148 comments

  • The ATO has a responsibility to catch and prosecute those who do not declare their full incomes. If all Australians would commit such deplorable acts the country would be unable to function.

    Come on ATO and get stuck into those bludgers. They are not worthy of living in this country and MUST be punished for their crimes.

    Commenter
    huggie
    Location
    conder
    Date and time
    May 10, 2013, 7:17AM
    • Too many australians do it.

      90% of the trades i have used all asked for cash.
      Most small business owners hide income.

      Do we focus on 100 rich guys or 1million small guys???

      Commenter
      cranky
      Location
      pants
      Date and time
      May 10, 2013, 8:18AM
    • The ATO would rather go after someone like me who made an error worth $120.

      They came at me full throttle, with threats of legal action, fines, and even prison time if I did not comply.....

      But then again, I didn't have a Million dollar legal team and accountants working for me.

      Commenter
      TommyP
      Date and time
      May 10, 2013, 8:30AM
    • The rich......good food.......golf & tennis......boating........overseas trips & tax evasion.......thats just the way life is. And most of them have never worked a day in their life.....just good fortune of being born to the right parents. A weight on society.

      Commenter
      Bazza
      Date and time
      May 10, 2013, 8:32AM
    • Let's not forget tradies and other self employed in their tens of thousands skipping tax and GST every day then claiming benefits due to low income. In the end everyone who earns should pay their fair share.

      Commenter
      wayfarer
      Date and time
      May 10, 2013, 8:41AM
    • And what about all those 'cash in hand tradies', huggie?? Probably billions of lost tax revenue every year, so lets all stop paying anybody that way and realise this tax evasion is also why this country is in such a poor state.

      Commenter
      Bo
      Date and time
      May 10, 2013, 8:45AM
    • O my Gosh!! a Whopping 2 people who may get charged! and another 60....If the ATO was at all Serious they would start cracking down on the 1000's of business's that do not pay mandatory super contributions,which in turn effects the amount of payroll tax and workers comp that they are cheating not only employee's out of! but the Government its self! I'm not sticking up for any tax dodgers but I run a business, who has to compete with other business's that flout the laws. This government could not care less about "the worker" they are transfixed on the So called "super rich" in one foul swoop state and federal Governments could simply audit 1000's of business's and add 9% to total wages earned and bingo! Thats the Super, Then you can determine the pay roll tax and on and on it goes.. And what about all those cash business, they are some of the biggest Tax "havens" all have and always will be..

      Commenter
      petal of melb
      Date and time
      May 10, 2013, 8:57AM
    • While I would dissent from the nationalist framework in which Huggie is operating, I can only second the substantive motion. The tax dodgers are a far, far greater drain on society than everybody who has ever set out to rort Centrelink.

      It is necessary, however, to realise that tax evasion is only the tip of the iceberg. In terms of losses to the public purse, a far greater problem is tax avoidance. The difference is that tax avoidance is legal. The people who do this are merely taking advantage of lower tax rates in other jurisdictions (often tax havens) so that they pay less tax than they would otherwise - much less tax. Virtually every large corporation on the ASX has a couple of subsidiaries in the British Virgin Islands. Their objective in doing so is to avoid tax legally, rather than to tell lies and engage in outright evasion. And they pay serious money to their tax accountants in order to achieve this.

      By all means crack down on the crooks who are ripping off the public purse through engaging in dishonest tax rorts. Little of significance will be achieved, however, unless the existence of tax havens is addressed - and I don't expect that, since it would require taking on the major corporations who run this country.

      Commenter
      Greg Platt
      Location
      Brunswick
      Date and time
      May 10, 2013, 9:00AM
    • It is window dressing, a show, a theater performance. It's for the little people to think that justice and equality are possible by crucifying a handful of wannabes so that the large fish can gorge themselves in peace. Actually, the biggest tax avoidance is enacted by the biggest companies, try the BIG 4, who are untouchable because they decide if ATO exists or who runs it. The entire western world is now dependent on the Offshore to fund its onshore debt, courtesy of the fractional reserve system. Take a look at your banks financial report, take a look at the interest paid on outstanding bonds: it exceeds what is declared as total profit attributable to shareholders... Where do you think that cash stream ends up? Mind you banks hold only about 7-8% reserves with respect to its liabilities (deposits) so their costs of funding should be nil. $120 billion is siphoned out of the economy only by the big 4 and ATO comes up with a list of 65 suspected individuals. What a joke!
      Just proves that Government as a principle has become a superfluous liability on all of us, just digging us into debt, or more precisely, stealing from us precisely for the offshore kingdom, who hold our debt. We would do better by keeping all the value earned with our work and distribute it ourselves to fund essential services and projects, and people would soon learn that if you give nothing you get nothing unless you have a good excuse and then must rely on generosity of others. A wise man once said that because taxes are compulsory proves that people don't really want to be governed, and thus the very premise of government representing us is revealed as a lie.

      Commenter
      A
      Location
      B
      Date and time
      May 10, 2013, 9:02AM
    • When a tradie creates something, like a house, he exchanges the value thus created for agreed value of another, so its is effectively barter, no real profit was made just an equal exchange. Bitter and useless people love to attack those who actually create things, but it is speculation that is a real theft, because without doing any work capital multiplies itself: that is what income really means, that is, income as profit. The "investors" love to argue that they are "risking" their capital by investing and that makes them entitled to income/compensation without creating any new value, but capital is more at risk when buried in the ground, from thieves and inflation (another kind of thief). Every new value created adds to the GDP which increases the value of all money in circulation, hence the money exchanged for tradie type work is already theirs, so they are really ripped off by being paid with their own money. Only speculators make profit.

      Commenter
      A
      Location
      B
      Date and time
      May 10, 2013, 9:14AM

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