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In this new financial year, Inland Revenue will be closing in on individuals and businesses that fail to report taxable income from offshore. Undisclosed international bank accounts, assets, life insurance policies and superannuation accounts held overseas will be of particular interest in 2010/11.

 

An increase in assessments and audits, as well as collaboration with international taxation departments this year, is expected to reveal a high number of New Zealand residents currently involved in tax evasion. Those caught will be subject to shortfall penalties of up to 150%, and may even face prosecution.

 

Voluntary disclosure by residents with thus far unreported offshore income will result in substantially lower penalties, and will help New Zealand residents to avoid legal complications. It is recommended that any residents currently receiving unreported income from an international source speak to their accountant about the best way to volunteer the necessary information to Inland Revenue as soon as possible.