Tax - and Confidentiality !

Paul Hogan was already an iconic Australian character when he secured the lead role in the movie Crocodile Dundee.  It turned out to be a box office success and was dubbed into a dozen languages for world wide distribution.  Hogan immediately became a very rich celebrity.

Profits derived in this way have become a nightmare for the tax people.  Unlike the typical Australian wage slave who receives a pay packet every Thursday a movie actor earns his or her rewards in a variety of countries and in a wide variety of currencies, all of which are subjected to the taxation laws of the countries concerned.

Because Paul Hogan is an Australian citizen the Australian tax office has the job of claiming whatever proportion of tax he owes here, and naturally Hogan employs gifted tax lawyers to claim every exemption possible.  We are well aware that tax evasion is rife with International companies shifting the rewards for intellectual property rights to low tax countries and using tax havens to make the money trail opaque.

Years after the success of Crocodile Dundee the Australian tax office claimed Hogan owed them a hundred and fifty million dollars.  Hogan's lawyers went to court and refuted this as an unfair ambit claim.  It became a battle between pen pushing accountants that looked unlikely to ever reach a conclusion - and so it ended in a " confidential settlement ".

The media was quick to claim that Hogan "won " that battle and managed to refute the main claims of the tax office.  Apparently this stung the pride of the tax commissioner and at an enquiry into taxation practice he claims Hogan was forced to pay a " substantial amount by way of tax and penalties. ".  Clearly, this breached the confidentiality agreement, which is still in force.

This comes at a bad time for the tax office.   We have very strict laws in this country as to how and under what circumstances information may be accessed.   Government agencies - and that includes both the police and the tax office - need to observe the protocols of obtaining a court order to access in most cases.

It now comes to light that the ATO has investigated a number of cases of senior staff trying to access records they are not allowed to examine.  Over the past financial year, thirty breaches were detected, resulting in twelve terminations and a number of demotions.   The tax office claims a high level of probity and this disclosure will be of acute embarrassment.

It will also cause a few people sweaty, sleepless nights.  The world of computers has made most records readily accessible, but those same computers leave " fingerprints " which show who gained access.   For those who peeked where they are not supposed to look - the investigators will now be looking for clues.

Meanwhile, the Paul Hogan tax saga is at stalemate.   The files are closed, but no doubt future " confidentiality settlements " will be harder to negotiate !