Reuters/File Tax lawyers in Australia are increasingly seeing their clients come under fire for launder money, with clients increasingly turning to tax lawyers as a last resort to avoid tax.
Australia’s Financial Action Taskforce (FATF), which oversees the taxation of overseas money and the avoidance of tax, said it had received more than 40 complaints from Australian clients about a growing trend in tax-related launderings and that more than 1,000 Australian banks had closed their accounts because of the trend.
In a report released on Monday, the taskforce warned that the trend of tax evasion by foreign companies could increase significantly if Australia does not act soon.
“The tax-evasion threat is real and has reached a critical stage, and it is now the task of the Australian Government to address it,” FATF chairman Peter Wallis said.
Australian banks, including banks in Sydney and Melbourne, are increasingly looking to tax law firms for advice, he said.
In the first two months of this year, FATF received more complaints from foreign-owned companies and banks than from Australian businesses and financial institutions.
While Australian banks are not obliged to open their accounts, they must close any accounts with foreign-based firms if they believe the accounts are linked to a tax evasion or money laundering offence.
It is also unclear if any Australian banks have been forced to shut their accounts due to a change in their tax laws, as they may be facing additional penalties.
There is no law that requires banks to close accounts for the purpose of tax avoidance, FATP said.
Tax evasion can include payments of money to overseas companies or companies registered in jurisdictions outside Australia, such as tax havens such as the Cayman Islands.