Project DO IT

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.


Popular posts from this blog

Div 7A: Issues when dealing with loans and unpaid present entitlements

The biggest changes in estate planning in a generation

What happened in tax in October