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ATO Amnesty for Expats

ATO TAX Amnesty for South African Ex-pats

The suggestion or rumour indicating a special deal, favouring ex-pats and wealth Australians has been around for a while.

Recently LinkedIN authors, Tax Connections Blogs  and the Australian Financial Report commented on the idea, and now even STEP has indicated there is a deal on the cards, the detail only is the uncertainty.

Australian Treasurer Joe Hockey supported ATO Commissioner Chris Jordan’s offer to ex-pats (undisclosed asset and income streams in their country of birth)  and wealthy people (undisclosed offshore income or assets)  a chance to come clean

Although detail is sketchy and subject to final approval. the known benefits includes:

  • avoid jail, as taxpayers will not be prosecuted for tax crime under such a plan,
  • capping back taxes to the last four years despite there being several decades of none disclosure to the ATO;
  • Deal will be for a limited time, possibly until the end of 2014 of end of tax year June 2015.

Learned authors and tax practitioners consider the current deal, as proposed, to beat past  amnesties in its offering certainty and capped tax exposure.

The ATO’s Mr Jordan is expected to announce the final rules within the next month.

Typical South African Scenario

Most SA ex-pats arrived in Australia post 2006, well knowing that the ATO was not interested in their foreign income.

Since obtaining PR, taking up Australian passport (nationality) or marrying a resident in terms of the Social Security Act, most Saffas failed to disclose their SA trust to the ATO.

Why should I have disclosed it? This question is often posed and very few ex-pats understand the difference between the SA tax laws on trusts and the Australian tax laws.

An Australian trustee or beneficiary of a South African trust (being an offshore trust in ATO eyes) could result in ATO tax disclosure, ATO tax liability and consequential exchange control issues.

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