Australia Chasing $675 Million Evaded Through Swiss Accounts

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By Peter Hill

Australia’s tax authority is chasing down A$900 million ($675 million) in suspected undeclared income transferred to Swiss bank accounts.

Minister for Revenue Kelly O’Dwyer revealed May 2 that the tax authority is investigating whether 106 Australians “are using a sophisticated system of numbered accounts to conceal and transfer wealth anonymously to evade their tax obligations in Australia.”

The Australian Tax Office will investigate the “high risk” Australians for ties to Swiss banking relationship managers who have reportedly facilitated tax evasion schemes O’Dwyer said in a news release.

In working with the Australian Transaction Reports and Analysis Center, O’Dwyer said the ATO had identified “5,000 cross-border transactions worth over A$900 million” carried out by the 106 Australians carried out in the past 10 years. The transactions ranged from “as little as A$25 and up to A$24 million.”

“This is another reminder to those who devise, promote or participate in tax evasion schemes that their time is up. Taxpayers can’t expect to be able to hide their tax affairs offshore,” O’Dwyer said.

Credit Suisse Group AG

The minister didn’t reveal the bank involved with the ATO’s investigation. However, in late March, Credit Suisse Group AG was surprised when five countries—Australia, U.K., France, Netherlands and Germany—jointly began a tax evasion and money laundering investigation that included visits to its London, Amsterdam, and Paris offices.

The number of taxpayers being chased by the tax office about the accounts has been whittled down from 578 originally identified as having suspicious Swiss accounts. The tax authority obtained the information in those raids.

Credit Suisse said April 1 that, consistent with its “zero tolerance”to tax evasion policy, it continues “to work closely with the local authorities in all matters and particularly in this new case.”

Credit Suisse also it doesn’t want to “do business with clients who are unwilling to provide the required evidence.” The bank also said it had made “significant investments”to implement the new ‘Automatic Exchange of Information’ in tax matters standard for its European sites effective that day.

Given the reduced number of Australians actually under investigation, O’Dwyer noted that though “the ATO has found the majority of Australians identified in the data to have complied with their tax obligations, a range of immediate compliance actions are being taken against 106 taxpayers, and one is under assessment by the Government’s cross-agency Serious Financial Crime Taskforce.”

Information releases like the data ATO received at the start of the current investigation are becoming more regular, O’Dwyer said.

To contact the reporter on this story: Peter Hill in Sydney at correspondents@bloomberglaw.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bloombergtax.com

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