Sydney, Australia: A near 100% conviction rate from Project Wickenby alongside ever-increasing Government funding and commitment of community resources should send a clear warning to any taxpayer who seeks to evade Australian tax through dubious offshore activities will be caught, according to PKF Chartered Accountants and Business Advisers.

According to Carlo Moretti, Tax Partner and Business Unit Leader for PKF, taxpayers with undisclosed offshore arrangements have no choice other than to review the tax efficacy of their offshore activities, and if their offshore activities do not stack up legally and within the spirit of Australian tax rules, taxpayers should expeditiously ‘fess up and pay up’ as this is the only real alternative to criminal conviction and the likely imposition of a custodial sentence at Her Majesty's pleasure.

Mr Moretti said “Project Wickenby is a multi government agency task force, and the ATO has offered various initiatives to taxpayers who avoided their Australian tax obligations through fraud or evasion to fess up and pay up. Thousands of taxpayers availed themselves of these ATO initiatives by proactively making a bona fide full and true disclosure of their offshore activities and tax shortfalls. These taxpayers received substantial financial and non financial benefits including reduced shortfall penalties, reduced interest charges and no criminal prosecution (subject to meeting other criteria). 
 

“However, these amnesty offerings have concluded and the ATO is keen to increase the visibility of its convictions. If you have engaged in tax avoidance by fraud or evasion, and you haven’t voluntarily disclosed your offshore activities to the ATO, it’s only a matter of time until the ATO and other agencies track you down and hold you accountable” he said.

Mr Moretti also pointed to the ever-improving detection systems, including Government task forces and Wickenby-specific software, as further evidence of the ATO’s intent and capability.

“AUSTRAC is Australia's anti-money laundering unit, and this agency recently received a significant boost in funding by the Government, with the directive to assist the offshore investigations of Project Wickenby.  Furthermore, the ATO has recently upgraded its data-matching program software, enhancing the Commissioner’s investigative powers to detect and report irregularities. There really is no place to hide” he said.

The most common features of tax avoidance by fraud or evasion include taxpayers knowingly seeking to hide foreign assets such as cash, managed funds or rental properties from detection through suspicious transactions with tax havens. However, Mr Moretti noted that traditional tax havens and foreign banks are now cooperating with the ATO and other Government agencies.|

“The ATO continues to develop its market intelligence together with many offshore revenue  authorities through bodies like the 'Joint International Tax Shelter Information Centre' and the 'OECD Forum on Tax Administration'. When countries like Australia, Canada, the UK and USA increase collaboration and co-ordinate the exchange of information, and when such countries are also significant contributors of foreign aid to many tax havens, it is not surprising that in recent years Australia has signed Tax Information Exchange Agreements with 32 tax havens including Bermuda, Netherlands Antilles, Isle of Man, Jersey, Cook Islands, Vanuatu, Liechtenstein and the Cayman Islands to stamp out aggressive tax planning and avoidance fraud or evasion. 

“Moreover, offshore financiers and advisers who could normally be expected to safeguard and keep secret your financial records, such as offshore banks and investment houses, are also complying with Government and ATO investigations, and this change in approach dramatically increases the likelihood of fraudulent activities being detected” he said.

So far, Project Wickenby has netted over $1.1 billion in tax liabilities and resulted in 20 criminal convictions. More convictions can be expected in the next 12 months. In total, over 2,709 Project Wickenby comprehensive risk reviews and tax audits have been completed by the ATO, and many more tax examinations can be expected in the near future. ​