Offshore firms challenge Cayman’s production of records to Australia under TIEA for tax evasion investigation
Offshore firms claim Cayman Islands Tax Information Authority acted illegally when providing information to Australian Taxation Authority.
Three offshore companies domiciled in the Cayman Islands and the Bahamas yesterday filed a legal challenge to a decision by the Cayman Islands Tax Information Authority to provide “confidential information” to the Australian Taxation Authority pursuant to a Tax Information Exchange Agreement between the two countries.
For more on this story go to:
http://www.offshorealert.com/peter-borgas-tax-fraud-investigation-australia-cayman-islands.aspx
See:
Taxation Law – Australian Taxation Office(ATO) – Documents – Project Wickenby
Date: August 14, 2012
Authors: Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Documents are at the heart of most taxation disputes because they are crucial to a source and application of funds analysis. There are various requirements under the Tax Acts requiring substantiation and/or the provision of documents in support of various positions which may be taken e.g. the availability of loan agreements.
Project Wickenby is alive and well and once again the ATO has been given further resources by the government to track down tax non-compliance by taxpayers involved in international transactions involving Australia. Currently the ATO is focusing upon Vander Russell Gould of Gould Ralph a Sydney-based accountant and trustee and some of his clients.
The ATO is currently pursuing companies linked to Peter Borgas and his wife, Winnie based in Neuchatel, Switzerland for over $30M of outstanding tax assessments. The ATO alleges that the Borgas entities invested tens of millions of dollars in Australian shares over a number of years and repatriated proceeds overseas without paying Australian tax.
Of particular interest to the ATO is the Australian assets owned by Chemical Trustees Limited of London, Deerin Bros Properties of London, Bywater Investments of the Bahamas, Southgate Investment Funds Limited of London and Hua Wang Bank Berhad which holds a Western Samoan banking licence.
At the heart of this problem lies documents as the five companies involved in this matter are fighting a request by the ATO to obtain 10 years worth of accounts, documents and advice held by a UK accounting firm. The entities approached the Federal Court over the Commissioner’s $30M tax assessment. The ATO contends that the companies incorporated in overseas tax havens transferred significant amounts of money overseas when the securities were sold.
Counsel representing the taxpayers indicated that the ATO had served a formal request on Her Majesty’s Revenue in the UK dealing with 28 entities for the request including all documents relating to the accountants Vander Russell Gould and John Scott Leaver. Apparently there are hundreds of international transfers involved on which the ATO is relying.
Obviously this matter will be hotly contested given the diametrically opposed positions of the parties. Irrespective the matter involves documents and it is these documents which go to the heart of the matter. In all cases these matters are hotly contested as it is all about the documents, documents and documents. Irrespective of the outcome this case like so many before it goes to prove the importance that where a client(s) receives an onshore or offshore information request or notice they should take it seriously. Where documents are sought in any taxation matter and the taxpayer(s) do not believe they should be provided they should immediately seek legal advice concerning their position.
Conclusion
Documents or the lack of them are always at the heart of every taxation dispute and a view needs to be taken early on in any matter whether they are to be made available or not to the ATO. Many taxpayers consider the provision of documents to be unnecessarily intrusive.
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And:
Targets of Wickenby inquiry fight ATO over UK document requests
FIVE companies that are advised by a Sydney accountant, Vanda Gould, all of which are under investigation by Project Wickenby, are fighting a request by Australian tax officials to obtain 10 years of accounts, documents and advice held by a British accounting firm.
Hua Wang Bank, which has a Samoan banking licence, and four companies linked to Australian taxpayers, are seeking a judicial review in the Federal Court of the Commissioner of Taxation’s $30 million tax assessment.
Previous court hearings have heard that two of Mr Gould’s clients – a former Australian citizen who is now a businessman in Switzerland, Peter Borgas, and a Dr Joseph Ross of Sydney – contended that their decision not to file tax returns was based on Mr Gould’s advice.
The Tax Office said the companies were incorporated overseas, in tax havens. The companies invested in securities, and ”significant” amounts of money were transferred out of Australia when they were sold.
‘[They] appear to be connected with, or advised by, international tax advisers experienced in setting up structures designed to minimise tax and which involve the ready movement of monies between jurisdictions,” the Tax Office said.
The barrister John Hyde Page said the Tax Office’s formal request to Britain’s HM Revenue & Customs, canvassed the dealings of 28 entities, including all five companies he represented. The request also extended to all documents relating to two accountants, Vanda Russell Gould and John Scott Leaver.
He pointed to the similarity between the request to Britain and a subpoena served on Mr Vanda, which identified 15 of the 28 entities.
Michael Wigney, SC, for the commissioner, said there was a ”significant public interest” in being able to request the information from Britain. He said the companies’ claims that the commissioner was in contempt, or would obtain an impermissible or improper advantage, was not borne out by the evidence. Asked by Justice Nye Perram why the formal request had not been tendered in court, Mr Wigney said to do so would disclose other investigations.
For more on this story go to: http://www.brisbanetimes.com.au/business/targets-of-wickenby-inquiry-fight-ato-over-uk-document-requests-20120806-23q7n.html#ixzz26vZiFqxL
Go to the link below to read or download the: Agreement Between Cayman Islands and Australia
