The offshore financial industry has come under scrutiny on the back of a global tax investigation th...
The offshore financial industry has come under scrutiny on the back of a global tax investigation that involves several prominent Australians in the entertainment and sporting fields, plus potentially an undisclosed number of other international investors.
Four countries are being investigated following leads from the Australian Tax Office (ATO) and Australian Crime Commission (ACC), after an offshore tax evasion scheme was suspected. As reported in the Sydney Morning Herald, Philip Egglishaw and his Geneva-based accountancy firm Strachans are the subjects of the probe. So far, 12 well-known Australian have been involved in this scheme but it is likely hundreds of others could also be involved.
The activities involved in the alleged offences in Australia carry penalties of jail between 10 and 20 years in prison. No charges have been made as yet.
Chris Ellison, minister for Justice and Customs in Australia, said in a media report: "There are at least four countries involved overseas. We have had great co-operation from overseas law enforcement and we are gathering evidence as we speak from those law enforcement agencies in those countries. We are not divulging those countries at this stage. It is an early stage of the operation. It would be unwise to do so as action is still pending overseas."
Although official sources are remaining tight-lipped, what is public is that over a 10-year period Strachans had offices in London, Switzerland and Jersey and an offshore scheme involving setting up trusts in the British Virgin Islands. A source told International Investment the Jersey office closed around four years ago when Egglishaw moved to Switzerland to undertake business.
International Investment contacted the UK's Inland Revenue on the matter to see if an investigation was pending in the UK. A spokesperson told the magazine: "Due to customer confidentiality, we are unable to make any comment on an individual's affairs without their express permission."
The Australian officials have alleged that the scheme operated by creating fictitious deductions or concealing income from tax.
Michael Carmody, tax commissioner of the ATO, said: "The information indicates that, in some cases, deductions are claimed for payments for expenses and services that are fictitious. In other cases, assessable income derived offshore is not brought to account in Australia. This income is secretly returned to the country disguised as a loan, an inheritance, a gift, or through credit and debit cards."
In some cases the information indicates that false documents and transactions are used in setting up the arrangements in the first place. As part of the investigation of these cases, the ACC assisted by the Australian Federal Police and tax officers, has executed warrants at 48 sites around Australia. The ATO has exercised its powers of access to conduct unannounced visits at 37 sites.
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