"It is the world's best tax amnesty, "

says Morris Maroon, Head of the National Tax Team of law firm Rockwell Olivier. "There are only months before the best opportunity to turn foreign wealth tax-clean will come to an end. We will then see if the predictions of a particularly aggressive Australian Taxation Office will come true for offshore hidden wealth."

The Australian Taxation Office has offered taxpayers until 19 December 2014 an opportunity under Project DO IT to declare previously undeclared offshore income and offshore investments without incurring the significant financial and criminal implications that would otherwise arise.

The National Tax Team at Rockwell Olivier has assisted taxpayers in sorting their international tax affairs, including "cleaning up" their undeclared foreign income, assets and unpaid taxes. Experience tells us that getting prepared and early disclosure works best.

Project DO IT is the opportunity to clean up, even if there is no income but there is an undeclared asset such as property. This is especially so for anyone who has said NO to the tax return question:

During the year did you own, or have an interest in, assets located outside Australia which had a total value of A$50,000 or more?

Project DO IT: What is it?

Project DO IT limits the back-taxes to four income years and caps the tax shortfall penalty to 10% on the tax owing (it could otherwise be as high as 90%). If any back-income is $20,000 or less there is no shortfall penalty for that year. Interest charges at normal rates on the tax owed still applies.

Importantly, the Australian Taxation Office has declared that it will not prosecute for a criminal offence, or refer a disclosure for criminal investigation. And the offshore funds or assets that have been made tax-clean can be transferred to Australia. Every year an answer NO to the tax return question foreign assets of $50,000 or more is a fraudulent statement to a Government office; Project DO IT can fix this.

A person is only required to provide certain financial information under the initiative. Whilst 19 December 2014 is the deadline and whilst it seems months away, if the Australian Taxation Office detects a person first then the person will not be able to participate in Project DO IT.

If Project DO IT is missed, the Australian Taxation Office has unlimited time to review your tax affairs and amend your tax returns and the tax shortfall penalties can be up to 90%. Worse, there is a real chance of criminal prosecution. Using off-shore funds to evade tax is a fraud on the Australian Government and is money laundering; the maximum penalty could be 25 years in prison.

Let us help you take advantage of one of the world's best tax amnesties.

Is it really world's best?

Yes. The Australian Taxation Office has granted amnesties twice before in 2007 and 2009 but these were very limited. The tax amnesty benefits provided under Project DO IT as outlined above are more extensive.

What do you need to do?

Get the information together, but be careful about how this is collected and even more careful on how this is packaged for disclosure to the Australian Taxation Office. Often it takes time or getting the information is fraught with complexity. We would recommend lodging an expression of interest to avoid the risk of earlier detection by the Australian Taxation Office.

Time to pay the tax

It is possible to negotiate time for payment but interest charges will still apply. We have enabled time for payment of taxes, often without interest, if a special case is put forward.

Example: what is the result on $4000 of undeclared foreign income?

If over four years $4,000 of foreign income was earned but not declared in Australia ($1,000 was earned for each of four years) and the top tax rate would have applied, the tax that should have been paid is about $1,860. The tax that will be paid under the amnesty is about $2,670. But the tax that could apply without the amnesty is three times the tax missed at about $5,570. And without the amnesty there is a risk of criminal charges!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.