Aussie auditors want Greek tax details

Banks are insisting on foreign Tax Identification Numbers and tax agents warn not to 'prod the bear' this year


Desperate times call for desperate measures, and the Australian Tax Office (ATO) will be more thorough than ever in order to reclaim some of the money spent to keep the economy running during the COVID-19 pandemic.

The ATO has already beefed up its team of auditors and will employ extra resources, such as data-matching methods to link transactions from cryptocurrency-designated service providers to individuals’ tax returns, to ensure investors are paying the right amount of tax.

There will be a meticulous scouring of information provided by taxpayers, and on the ATO’s hitlist are the gig economy to ensure all Australians are declaring their freelance work, not beefing up their work-related expense claims, capital gains from cryptocurrency, property and shares – as well as a spotlight on money abroad.

Australian and international bank customers may have recently received letters from their bank asking if they hold tax residency status in a country other than Australia and if so, to provide a Tax Identification Number (for those with a Greek background this would be a Greek AFM tax file number).

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Bill Kalpouzanis is the Chief Operations Officer of the Bank of Sydney. He states that the bank is obliged to have clients’ foreign TINs on file. Photo: Supplied

Bill Kalpouzanis, Chief Operations Officer of the Bank of Sydney told Neos Kosmos that Australia is one of the many countries that have committed to an OECD Common Reporting Standard relating to the collection and exchange of financial account information. “By law, every time you open establish a new relationship with a Bank, you should be asked for this information,” he said.

“Bank accounts may be restricted unless this information is provided.”

Mr Kalpouzanis said that banks are “obliged to collect this information and provide it to the Australian tax authorities. However, Banks are not tax advisors, and people should talk to their tax advisors if they are not sure about what to do.”

He adds that Greece, as one of the countries which have subscribed to this standard, also requires customers with local bank accounts to provide their overseas tax residency details.

Tax adviser Evan Binos told Neos Kosmos that in the past he has had clients living in Greece seeking their Australian Tax Identification Numbers (TIN) to give to Greek banks.

Another Greek-Australian accountant which Neos Kosmos spoke to, and who wished to remain anonymous, said “if you have a bank account at a Greek bank, it is difficult for authorities to be able to find a person’s accounts when bearing in mind that other people share the same name” and that’s where the TIN comes in handy.

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Tony Anamourlis is a tax lawyer who has seen problems caused by the lack of a DTA between Greece and Australia. Photo: Supplied

Tax lawyer Tony Anamourlis told Neos Kosmos that “banks have a legal obligation to deduct withholding tax at the top tax rate of 47 per cent” should a bank customer refuse to provide their TIN from abroad. “If a bank requests your overseas TIN and you refuse to provide it, then customers who are foreign tax residents, may be reported to the ATO” as “this information is required as a statutory obligation”.

“The same would apply for all mainstream lenders like the ANZ, Commonwealth Bank and Westpac,” he said. “This actually goes hand in hand under the money laundering legislation in Australia,” he said.

“Greece and Australia have advanced their tax protocols with the assistance of the OECD to have entered into a multilateral competent authority agreement for the automatic exchange of financial accounting which enables both Greece and Australia and other tax jurisdictions to combat tax avoidance and evasion.”

Mr Anamourlis adds that the ATO already has access to people’s monetary activities abroad regardless of the gathering of foreign TFNs by banks, while also pointing to similar requests of Greek banks being made of clients who are also tax residents in Australia and/or other countries.

Problems arise for countries, like Greece, which do not have a Double Tax Agreement (DTA) with Australia, which means that the money taxpayers earn abroad could be taxed twice – once in Greece and once in Australia, for those who have activities in Greece.

Efforts have been made to put such an agreement in place with the Greek Community of Melbourne President Bill Papastergiadis having penned letters and numerous articles having been written on the topic.

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Without such an agreement in place for Greek Australians, tax is up for grabs by both the Australian and Greek governments regardless from where it originates. Taxpayers who move between these countries for short periods, who have family rentals and other investments or who receive pensions from abroad are affected by double taxation.

At this point, people who have land assets in Greece for which they don’t receive a rental income have nothing to fear from Australia as Australia does not tax wealth, in contrast to Greece which also charges land tax via ENFIA (joint property tax).

Tax agents warn that the tentacles of the ATO will stretch deeper this year than ever before, and warn against prodding the bear when it comes to hiding money.

“Their powers have been around for years, but this year the tax office is going to go hard.

“There is going to be an enormous crackdown on audits,” Mr Anarmourlis said.

Leading accountancy body CPA Australia advises to declare all forms of income to the ATO.

“Most transactions where money changes hands leave a digital footprint and the ATO has even greater information gathering powers than the police,” Elinor Kasapidis, Senior Manager of Tax Policy at CPA, told mybusiness

“If you’re thinking of playing hide and seek with the ATO, don’t expect them to close their eyes and count to 10. Assume they have full line of sight on your income and don’t poke the bear.”

She warned that while it is “legal to maximise your tax refund” it is “not legal to avoid paying tax” with most people going wrong when claiming deductions for work expenses.

“COVID-19 has significantly decreased international and interstate trips as well as local travel. The ATO is expecting reduced travel and motor vehicle expenses and will be checking unusual claims,” she said.

“Lots of people turned to the gig economy to make ends meet during COVID-19. The ATO is aware of these ‘side hustles’ and matches data from platforms like Uber, Airbnb and AirTasker against individuals’ tax returns,” she said.

“This means the jig is up on the gig economy this tax time.”