Australians funnel more than $100bn into foreign tax havens

Australians have funnelled more than $100 billion into offshore “tax haven” countries, new data has shown. See the list of our favourite destinations.

Secret Swiss bank accounts are the top choice for Australians funnelling more than $100 billion offshore into “tax haven” countries, according to new data released by the financial crimes watchdog.

More than $65 billion was flagged to be sent from Australian banks to Switzerland in the last financial year, a jump of more than $20 billion since 2021, Austrac has revealed.

While Switzerland topped the list, the second most popular countries dubbed as tax havens are the United Arab Emirates with $10 billion earmarked for transfer, followed by Jersey with more than $4 billion and Bermuda more than $2 billion.

The information about international funds transfers, which is provided to Austrac from financial institutions, was obtained under Freedom of Information laws and reveals there are 11 countries listed as tax havens and a further 10 as secrecy jurisdictions.

The revelations follow a global tax report, The EU Tax observatory, which this year estimated Australians hold almost $400 billion in known foreign tax havens.

Switzerland is considered to be the most popular international tax haven for Australians due to its low tax levels and strong privacy laws.

It was a favoured destination for funds in one of Australia’s biggest tax dodge schemes which involved a Swiss-based base firm and financial adviser.

Glenn Wheatley was jailed for tax fraud. Picture: David Geraghty/The Australian

The scheme was targeted by the Australian Taxation Office’s (ATO) Operation Wickenby, a nationwide tax probe, which saw music promoter and John Farnham’s promoter Glenn Wheatley jailed for tax fraud. Farnham was never accused of any wrongdoing.

The ATO also went after Crocodile Dundee star Paul Hogan and his sidekick John (Strop) Cornell, for unpaid tax but their cases were dropped and a settlement reached. The pair always denied any wrongdoing.

Paul Hogan and John Cornell reached a settlement with the ATO. They consistently denied any wrong doing

Australian Taxation Office Assistant Commissioner Belinda Darling said offshore bank accounts are not illegal and there are many legitimate reasons for having them.

However, she said “some taxpayers enter into offshore arrangements to deliberately and dishonestly hide income or assets in order to gain a financial advantage and evade tax,” she said.

Ms Darling said the ATO together with international partners are actively seeking data about Australian tax dodgers using tax and secrecy havens.

ATO Assistant Commissioner Belinda Darling. Picture: Supplied

Ms Darling said Australian banks and financial institutions are required to give information to the ATO about offshore bank accounts of Australian residents which gives them visibility of the amount of money held in bank accounts overseas.

The EU Tax Observatory report said Australians are holding about $370 billion ($A729 billion) in foreign tax havens and multinational companies are shifting profits to lower-taxing countries which is ultimately costing up to $11 billion in lost tax earnings.

The report said tax evasion is falling, but global billionaires have an effective tax rate of 0-0.5 per cent of their wealth

“Tax evasion, wealth concealment, profit shifting to tax havens are not laws of nature,” said Gabriel Zucman, the co-author of the EU Tax Observatory report.

Research from the Tax Justice Network (TJN) shows, worldwide, countries collectively lose $US480 billion in tax to tax havens a year due to profit shifting and offshore tax evasion by wealthy individuals.

The TJN has warned countries will lose nearly $US5 trillion ($A7.6 trillion) to tax havens over the next decade if it continues.

Originally published as Australians funnel more than $100bn into foreign tax havens