Australia–US automatic tax information sharing

Posted on October 17, 2015 by ATB Chartered Accountants

Tax information sharing aims to improve transparency of financial arrangements and transactions for tax. They do so by maintaining higher information collection standards, increasing stability in the financial sector, and assisting the integration of international financial jurisdiction into a wider community.

In Australia, tax information sharing means that our revenue will be protected through access to international information. As well as this, compliant businesses and individuals will be protected from those who do not fulfill their tax obligations.

The ATO says it has undertaken its first ever automatic tax information sharing with the US Internal Revenue Service (IRS). Bank information details of over 30,000 financial accounts worth over $5b are being provided to the US under the new powers of the US Foreign Account Tax Compliance Act (FATCA).

According to the ATO, the information provided on US citizens and tax residents with Australian bank accounts is the first step in a wave of transparency measures being implemented globally by governments and tax administrations. Beginning in 2017, close to 100 countries will be sharing non-resident data under the OECD Common Reporting Standard (CRS).

In return, the ATO will receive data from the IRS about Australians with financial accounts in the US and will use that data to detect cases of undeclared offshore income and tax evasion.