Volume 15, Issue 1 – Dirkis and Bondfield

STRIKING GOLD OFFSHORE WITH AUSTRALIA’S TAX INFORMATION GATHERING POWERS: ALCHEMY OR EVOLUTION?

By Michael Dirkis and Brett Bondfield

Included in the law introducing the first Commonwealth income tax in 1915 were provisions which conferred on the Commissioner of Taxation wide powers of investigation and to gather evidence. They were introduced at a time when Australia had no offshore investment and most foreign income was exempt. Despite the dramatic change in Australia’s economy over the last 100 years these fundamental powers have broadly remained the same. However, recent media coverage of the Commissioner’s successes in pursuing offshore tax evaders under the guise of Project Wickenby suggest there have been further developments that have converted these ‘lead bullets’ into gold. This paper explores whether that has occurred through ‘tax alchemy’ or through a quiet evolution. It does so by reviewing the development in the Commissioner’s offshore information gathering powers over the last 21 years and briefly examining the emergence of multilateral treaties that have the potential to enhance the effectiveness of those powers further.

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