I would like to remind members of the ATO’s offshore income
voluntary disclosure initiative, Project DO IT, which the Commissioner of
Taxation Chris Jordan, AO launched at our national convention earlier this
year. It has been approximately three-and-a-half months since the initiative was
launched and it is due to expire at the end of the year.

We at the Institute supported the initiative at the time of
the launch as it reflected a pragmatic approach to encouraging taxpayers to
return revenue that is currently outside the tax system. For taxpayers, it provides
an opportunity to bring funds onshore in the shadow of increasing international
cooperation on exchange of information.

There have been a number of other offshore income voluntary
disclosure initiatives in the past but this initiative contains some unique
features: the ATO won’t go back beyond the standard amendment period, which is
usually four years; and it may also agree not to tax taxpayers on the
winding-up of their offshore structure. However, there are features that
taxpayers should be wary of, such as not being entitled to utilise certain losses
and shortfall interest charges.

Three-and-a-half months on, taxpayers have been slow to take
up the offer. Mr Neil Olesen, Second Commissioner, Compliance, ATO, testified
to the Senate Estimates Committee on Thursday 5 June 2014 that approximately
100 people had come forward under the initiative to date. We understand that
these 100 disclosures revealed total additional income of over $8m. It will be
interesting to see whether the uptake accelerates in coming months.

Given the slow uptake, I want to make sure that members are
aware of the ATO’s initiative. For those clients who satisfy the criteria, it
provides an important opportunity to bring their money onshore on favourable
terms.

The Institute is also keen to hear from members how they
have found the disclosure process in practice. Please contact the tax policy
team if you have any feedback on this initiative and how the material published
by the ATO with respect to the initiative could be improved.

 Michael Flynn CTA is President of the National Council at The Tax Institute.

The Tax Institute is Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.