The Turnbull Government today introduced legislation to the Parliament that will further tackle offshore tax evasion.
The legislation implements the OECD's Common Reporting Standard for the automatic exchange of financial account information.
The Standard will assist the tax office to crackdown on taxpayers hiding funds and investments offshore in order to avoid paying their fair share of tax in Australia.
The Standard was endorsed by G20 Leaders during Australia's G20 Presidency and Leaders committed to commence the confidential exchange of financial account information under the standard between revenue authorities as part of the fight against tax evasion.
The Standard ensures that the Australian Taxation Office will receive information annually on Australians' offshore accounts, such as investment income and balances, and use this information to check if the offshore income has been declared in Australian tax returns. In exchange, certain financial institutions in Australia will collect information on foreign residents' accounts and report it to the Australian Taxation Office. It will then be reported to the foreign residents' tax authorities.
The Government will implement the Standard from 1 July 2017. Initial exchange of information with foreign tax authorities will take place in 2018.
Over 95 jurisdictions have committed to implement the Standard, including Luxembourg, Switzerland, the British Virgin Islands, the Cayman Islands, the Isle of Man, Guernsey and Jersey.
In June, Australia signed the multilateral competent authority agreement for the Standard, which enables the information to be exchanged between jurisdictions' tax authorities.
The Government is committed to ensuring everyone pays their fair share of tax in Australia. This includes implementing the:
- Common Reporting Standard to expose Australians with hidden offshore investments;
- Multinational Anti-Avoidance Law to ensure multinationals that make sales in Australia do not avoid tax by booking revenue offshore; and
- G20/OECD Base Erosion and Profit Shifting recommendations on country-by country reporting, treaty abuse rules, and harmful tax practices and exchange of rulings.