Tax search for offshore cash stashes

Informers, tax treaties and expensive art purchases will help the tax office try to net millions of dollars in tax stuffed offshore by wealthy Australians.

Hundreds of people are showing interest in using an amnesty to declare income that had been beyond the reach of the Australian Taxation Office.

The tax office started Project DO IT this year to track down those who have used exotic destinations overseas to minimise tax.

Under the program, people who confess will get substantially reduced penalties and avoid criminal investigations.

The tax office is tapping previously unavailable resources, including data from overseas tax agencies, to track Australians.

It is also getting information from informers overseas who have revealed tax practices and previously secret banking details of tens of thousands of wealthy individuals.

AUSTRAC, which tracks large movements of money in and out of Australia, is being used while the tax office is also watching unusually big purchases of assets such as art and property.

Three months into the program about 166 disclosures have raised $13 million in tax liabilities. There have been 250 expressions of interest by people looking to get their affairs in order.

There have been another 600 inquiries, including by one adviser who believed a client had up to $600 million offshore.

According to the tax office, most people getting in touch about their affairs have used accounts in Switzerland, Israel, Liechtenstein, the Netherlands, South Africa and Hong Kong to circumvent Australian tax laws.

Deputy commissioner Michael Cranston said more previously undeclared tax liabilities would be revealed in coming months, adding the tax office was getting more avenues to previously secret information. "The net is closing for people who have undeclared offshore income," he said.

A new Australia-Switzerland tax treaty is due to come into operation next year.