Banks warn wealthy clients of ATO crackdown on tax havens

Swiss banking giant UBS has revealed it has fielded requests from the Australian Taxation Office regarding the use of offshore tax havens by wealthy Australians.

UBS has been at the centre of a storm of international controversy about the use of tax havens by the rich.

In August last year it was forced to provide the names of 4,000 alleged tax cheats from the United States after legal action was launched by the US Government.

That action sparked a rush of requests from tax agencies around the world who want to know if there are tax cheats using Swiss banks to hide income.

“Tax and regulatory authorities in a number of countries have (subsequently) requested information relating to the cross-border wealth management services provided by UBS and other financial institutions,” UBS said in its annual report, which was released overnight on Monday.

“In particular the revenue services of Canada, the UK and Australia have served requests upon, or made inquiries of, UBS and other Swiss and non-Swiss financial institutions.”

UBS says it is cooperating within the limits of Swiss privacy laws and said it was premature to speculate on the outcome of the investigations.

In response, the Australian Financial Markets Association has written to 50 foreign banks operating in Australia to ask them to pass on the ATO’s tax haven warnings.

In December, the ATO announced an amnesty for taxpayers who have not declared offshore income. The amnesty runs until June 30 and will allow taxpayers with undeclared income to dodge harsh penalties or criminal prosecution.

“Tax advisers have told us many of their clients with undisclosed foreign income want to come forward to set things right, but are concerned about the consequences of doing so – particularly the potential for criminal investigation,” ATO Tax Commissioner Michael D’Ascenzo said last year.