More than 1.6m accounts identified in data shared with Australian authorities by 65 countries including tax havens

Individual Australians hold more than $100bn offshore, spread across more than 1.6m accounts, according to new taxation office data collected under an international cooperation agreement.

The Australian Taxation Office has already sent about 2,000 letters to Australians who it has identified have failed to declare $20m in income held offshore, telling them it knows about their formerly secret accounts, assistant commissioner Karen Foat said.

In one case, an Australian failed to declare $28,000 in company dividends paid into an American account, she said.

She said Australians who had investments overseas should declare them to the ATO to avoid penalties and minimise the amount of interest they have to pay on tax due in previous years.

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About 370,000 taxpayers have so far been identified as holding offshore accounts “and this is just the beginning”, she said.

The ATO has collected the data under a program called the common reporting standard, under which 65 countries exchange information including account balances, names of account holders and income from dividends or asset sales.

Countries in the scheme, which is part of a push by developed economies to stem the flow of money to secretive offshore jurisdictions, include the US, the UK, India, Italy and Caribbean tax havens the Cayman Islands and the British Virgin Islands.

“Some of them are our closer partners or jurisdictions that you might expect we already share information with, like the UK, and some of them perhaps people might have thought of as tax havens and the like in the past – Bermuda, Luxembourg and places like that as well,” Foat said.

She said the ATO received the first tranche of information in September last year but this was the first full tax year in which the system was providing data.

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Many people might have been born outside Australia or have spent some time working overseas and forgotten that they had offshore accounts or investments, she said.

“It might just be a bank account, it might be a property or a share in a family business and they kept that when they came back to Australia,” she said.

She said some people might not realise that even a small amount of overseas income needed to be declared in Australia.

“When we look at the individuals tax gap of $8.7bn – so that means we think there’s about $8.7bn in tax that’s not being paid by Australian individuals … what that’s actually made up of is lots of small amounts.

“So, when people are forgetting to declare a little bit, and they’re under-paying their tax by a little bit, that across a big population [of] 10 million individuals not in business, that’s $8.7bn.”

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The 2,000 letters sent so far resulted in taxpayers declaring an additional $500,000 in income, she said.

But she said the ATO did not yet have an estimate of how much extra tax it could raise from the data-matching project as a whole.

She said she was not surprised to discover Australians had so much wealth stashed overseas.

“Globalisation means the world’s getting smaller, lots of people travelling more, the digital world kind of means it’s easier to interact with overseas than it might have been in years gone by,” she said.