International business visas carry taxation conditions

Date: Jan 24, 2012

The importance of having qualified immigration advice from a reliable source when it comes to visa applications has been highlighted by recent moves from a prominent government body.

In an effort to deliver on its promise to crack down on evasive practices, the Australian Taxation Office (ATO) has signed up to a unilateral agreement with the Organisation for Economic Co-operation and Development (OECD).

The move will enable the ATO to request the financial details of individuals it suspects may be keeping assets offshore to benefit from special taxation arrangements.

While it is not illegal for individuals to keep their wealth in various countries, the move will assist the tax department in determining the correct values it needs to apply in order to deliver both citizens and residents with accurate requests for payment.

The move was announced as part of the ongoing Project Wickenby - an initiative developed in 2006 that involves the cooperation of a number of government organisations - to help reclaim tax debts held by individuals and corporations overseas.

To date, the ATO has issued $1.18 billion in liabilities to various parties who were found to owe the department.

Of those, the office has been able to recoup $593.7 million as of October 2011 and has successfully seen 21 convictions.

In addition to these feats, the ATO has begun actively investigating the financial activities of individuals with a net worth in excess of $30 million.

Using publicly available documents, such as corporate annual reports and quarterly updates, researchers are beginning to delve into the financial habits of the wealthy - both permanent residents and citizens alike.

By tracking their reported income and expenditure in this way, the ATO is able to better determine how much these individuals owe in taxation - and the OECD agreement means that they are better equipped to request additional information from international sources should it be required.

Speaking on the results to the Australian on January 16, taxation commissioner Michael D'Ascenzo, anecdotal evidence suggests that offshore tax avoidance has become "too risky" for previous offenders.

D'Ascenzo said: "You can try and be very convoluted and go through various blind trusts and dummy companies and it makes detection that much harder, but there is greater international co-operation."

While the financial details of clients is outside the expertise of an immigration lawyer, these accredited specialists are able to provide qualified advice on the rights and responsibilities that come with Australian residency.

With the noted increase in migrants travelling to Australia for employment and business opportunities, it is increasingly important that they are aware of the legal obligations that relate to both temporary and permanent visas.