Latest News

Hot Issues
spacer
Fringe Benefits Tax (FBT): employees’ private use of vehicles
spacer
ATO to contact clients over bank details
spacer
ATO claws back $850m in unpaid SG in FY 17-18
spacer
Appetite for property in SMSFs shows signs of life despite tough market
spacer
Superannuation gender gap narrowing, research shows
spacer
Identification numbers for directors
spacer
How financial advice helps create wealth.
spacer
Australia's vital statistics
spacer
Unlocking equity crowdfunding in Australia
spacer
$20m boost for SME clients looking to exporting
spacer
Work-Related Expenses
spacer
ATO updates crypto guidance
spacer
ATO zones in on hundreds of newly created reserves
spacer
Senate passes $20,000 instant asset write-off extension
spacer
Victorian Vacant Property Tax
spacer
Director Penalty Notices
spacer
ATO set to pounce on undisclosed income streams
spacer
In case you missed it – The company tax Bill that did pass Parliament.
spacer
GST spotlight headed to smaller end of town
spacer
Superannuation Amnesty – Maybe! Maybe Not!
spacer
ATO drills in car-sharing focus this tax time
spacer
What is Bankruptcy?
spacer
Update of Australia's vital statistics
spacer
ATO speaks on risk factors, surveillance triggers for FY19
spacer
ATO’s corporate residency guidance cops backlash
spacer
ATO dispels top tax time myths to clients as clampdown rolls out
spacer
Tools for budgeting, cash flow, Super and more ….
spacer
Guidance for SMSFs on transfer balance reporting
Article archive
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
ATO set to pounce on undisclosed income streams

The ATO has warned that it will be increasing efforts to identify taxpayers who leave out certain payments and foreign income streams, as new international reporting standards kick in this month.

       

 

The tax office said it will strive to recover an annual shortfall of nearly $1.4 billion caused by individuals who leave income out of their tax returns, as part of its broader plan to recoup the $8.7 billion individual tax gap it revealed earlier this year.

Foreign income sources will be scrutinised, with the Common Reporting Standard (CRS) seeing the first lot of data to be exchanged with over 100 foreign tax authorities on 30 September.

According to the ATO, AUSTRAC data shows that taxpayers most commonly receive foreign funds from countries including the UK, USA, China, Switzerland, Hong Kong, New Zealand and Singapore.

“It’s important that everyone pays their fair share of tax, regardless of whether they earned income in Australia or abroad,” said ATO assistant commissioner Kath Anderson.

“We understand that people make mistakes and can forget to include some of their income. But those who leave out income to avoid paying their fair share of tax should be aware that there can be penalties and interest. Penalties can range from 25 per cent up to 75 per cent of the shortfall, in addition to paying the money owed.

“The most common mistake we see is taxpayers leaving out cash wages. But we are also seeing taxpayers either deliberately or accidentally failing to include income from second jobs, capital gains on cryptocurrency, the sharing economy, the gig economy and foreign-sourced income.”

Speaking to Accountants Daily, BDO partner Mark Molesworth said the implementation of CRS and the notice from the tax office meant accountants should revisit questions around foreign income streams with their clients.

“It will be worth for accountants to specifically ask clients whether they do have any sources of income offshore, any investments offshore,” said Mr Molesworth.

“It would be worth mentioning to clients, without indicating that they disbelieve their clients, that the CRS is now coming in and the data is going to be provided to the tax office, and if there is something that needs to be disclosed, then now would be the time to do it.

“My view is they would be very wise to make a voluntary disclosure and talk to the tax office before the tax office starts talking to them because their powers are broad and can be applied quite harshly, and you tend to get a better hearing from the tax office if you are voluntarily disclosing something to them rather than waiting for them to talk to you.”

 

 

Jotham Lian
19 September 2018
accountantsdaily.com.au

 

© O'Brien and Partners 2011 - All Rights Reserved | 91 Station Street, Malvern VIC 3144 | Tel: 03 9509 3911 | Fax: 03 9509 3922