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Tax Haven Hotspots Revealed in Australia’s Financial Data
A staggering 7.1 million accounts held by foreign tax residents have been found to be holding a total of $241 billion in Australian financial institutions, with the majority of these accounts linked to notorious secrecy jurisdictions.
Top 10 Countries with Largest Average Account Balances
According to data released by the Australian Taxation Office (ATO), the top 10 countries with the largest average account balances are all so-called “tax havens”, which offer low or non-existent taxes and laws that protect the identity of asset owners. The Marshall Islands topped the list with an average account balance of $2.9 million and 164 accounts, totalling nearly half a billion dollars in Australian bank accounts.
Notorious Tax Havens
The rest of the top 10 list consisted of other notorious tax havens such as:
- Tuvalu
- British Virgin Islands
- Jersey
- Cayman Islands
- Bermuda
- Antigua and Barbuda
- Guernsey
- Saint Kitts and Nevis
- Gibraltar
Expert Insights
“This is a serious concern because it means that there are significant risks that some of this money is being laundered through Australia,” said Mark Zirnsak, an expert on tax evasion. “The current system allows shell companies and trusts to hide their true owners, making it difficult for authorities to track down illegal activities.”
Government Response
The ATO has responded by stating that it now has information-sharing arrangements with six of the 10 countries listed, including the Marshall Islands, and is working to improve its reporting requirements for financial institutions. However, critics argue that more needs to be done to combat tax evasion and money laundering.
Call to Action
The government is urged to introduce a public register of beneficial ownership of companies and trusts to combat tax evasion and money laundering.
Background Information
The data released by the ATO is part of international common reporting standards reforms pushed by the Organisation for Economic Co-operation and Development (OECD) and adopted in Australia through legislation passed in 2016. The reforms aim to reduce tax minimisation and financial crime through the sharing of financial data between countries.
Key Findings:
- 7.1 million accounts held by foreign tax residents with a total value of $241 billion
- Top 10 countries with largest average account balances are all “tax havens”
- Marshall Islands top the list with an average account balance of $2.9 million and 164 accounts
- US resident companies and individuals hold the largest total amount of money in Australian accounts, at around $88 billion
- China comes second, followed by the UK, Singapore, and New Zealand