Wealthy Australians connected to a Panama law firm Mossack Fonseca advising on the use of offshore havens to minimise tax are being investigated by the Australian Tax Office (ATO).
The leak of a mountain of data connected to the law firm has focused attention on the use of tax havens to hide the financial holdings of powerful people, including prime ministers, parliamentarianst and criminals.
From that leaked data, more than 800 individual Australians have been identified by the ATO and 120 of those have been linked to an associate offshore service provider in Hong Kong.
“Taxpayers can’t rely on these secret arrangements being kept secret and we will act on any information that is provided to us,” says ATO deputy commissioner Michael Cranston.
These Australian cases relate to the analysis of 11.5 million documents by the International Consortium of Investigative Journalists.
The documents include nearly 40 years of data from inside Mossack Fonseca, a law firm based in Panama with branches in Hong Kong, Miami, Zurich and 35 other cities.
Cranston says the ATO has ramped up its compliance work to deal with those taxpayers who have failed to disclose offshore income and assets.
“We have been analysing the latest data against information these taxpayers had reported to the ATO and against the information we already have,” he says.
“We are also working closely with the AFP (Australian Federal Police), Australian Crime Commission and AUSTRAC to further cross-check the data and strengthen our intelligence.”
Some cases may be referred to the Serious Financial Crime Taskforce. This Taskforce builds on Project Wickenby where the ATO raised $2.29 billion in tax liabilities and there were 46 criminal convictions.
“The information we have includes some taxpayers who we have previously investigated, as well as a small number who disclosed their arrangements with us under the Project DO IT initiative,” he says
“It also includes a large number of taxpayers who haven’t previously come forward, including high wealth individuals, and we are already taking action on those cases.
“Through data analysis we have been able to identify patterns such as clusters of individual taxpayer and advisers for further investigation.”