International Law

The Australian Taxation Office's  submission to the US Senate Committee on Homeland Security and Governmental Affairs for a hearing into tax haven banks and US tax compliance contains the following points:

• OECD estimates that between $US 5-7 trillion are held in tax havens or banking secrecy jurisdictions.
• the Australian Transaction Reports and Analysis Centre (AUSTRAC) says that in the fiscal year ending 30 June 2007, about $16 billion was sent directly to tax havens from Australia, and approximately $18 billion was sent directly from tax havens to Australia.
• a significant part of the flow of funds to and from tax havens is not abusive. These amounts may relate to tourism or travel, or legitimate business in goods or services. Another aspect of these funds relates to havens as ?hubs? for certain financial transactions like insurance, private equity or hedge funding. These financial transactions may not give rise to tax risk other than in terms of tax competition.
• A range of structures or typologies have been identified as abusive tax haven schemes. These range from the use of false invoices to inflate deductions to the establishment of legal entities to hold securities or other assets. The common element in all of these typologies is the secrecy or lack of transparency by which beneficial ownership can be hidden.
• The ATO's top priority is to deal very firmly with the worst abuses and in particular promoters and their onshore associates who encourage use of abusive tax haven schemes. For this purpose, promoters are those who design, market or implement abusive haven schemes, and include some banks and financiers, accountants and lawyers, agents, trustees and brokers. Often based in tax havens or banking secrecy jurisdictions, promoters specialise in hiding assets or income so as to divide legal and beneficial ownership.