ATO deputy commissioner Will Day said 60 investigations were underway by the J5 members, with Australia directly involved in 12. At least one of those being targeted was a “global financial institution” and its intermediaries, which are believed to have enabled taxpayers to hide assets and income details.
He said there was clear evidence of people based in Australia who were facilitating the avoidance of tax or partnering with others in overseas jurisdictions in criminal activity.
The partnering of the ATO with other members of the J5 meant far more information was now available that underpinned data-matching activities aimed specifically at tax criminals.
“At no other time have criminals been at greater risk of being caught,” Mr Day said. “In Australia, they are often intermediaries who are playing a role between the tax evader and an offshore entity.”
A key focus has been on cryptocurrencies. The Netherlands’ tax agency recently took offline a cryptocurrency “mixer”, with information from that being analysed and shared with other J5 members. Crypto mixing services increase the anonymity of holders of cryptocurrencies. An algorithm is used to mix data that potentially identifies the holder of the currency with other holders, making it extremely difficult to track ultimate ownership of the asset.
Mr Day said links between cryptocurrency investment and money laundering were a particular concern, with criminals using the online currencies to avoid detection.
He said tax evasion via cryptocurrencies was “not a victimless crime”.
“We’re seeing the use of cryptocurrencies in ways that we haven’t seen before,” he said. “At the Australian level, there is definitely legitimate use for investment in cryptocurrencies, but we’re also seeing the use of them to facilitate tax crimes.”
Information among the J5 is now being shared in a “more organised” manner, including through a computer network that enables the agencies to compare, analyse and exchange data anonymously.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.