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Crocodile Dundee Held in Australia Tax Prison
If there ever was a more wrongheaded application of ravenous tax collectors anti-tax haven frenzy recently than this, I’ve missed it.
I refer to the fact that the famous Aussie actor known to millions worldwide as “Crocodile Dundee” is being detained by Australian tax authorities, risking arrest if he tries to leave his native country.
The actor whose name is Paul Hogan is famous for his laconic sense of humour, and in the 1980s Australia skyrocketed as a tourist destination after he enticed Americans to “come on, come and say g’day. Every day is a good day in Australia.”
But Hogan was banned from leaving the country on Friday night, just hours after arriving in Sydney for the funeral of his 101-year-old mother, Florence.
Dispute About Tax Domicile
Hogan has been accused by Australia tax collectors of evading tax on about US$34.5 million (Au$39 million) of alleged undeclared income. The size of the bill from the Australian Taxation Office (ATO) is unknown.
Apparently the ATO considers the 70-year-old film star an Australian resident for tax purposes for the years 1987 to 2005, despite the fact that he lived and paid taxes in the U.S. from 1995 to 2002 where he is a legal resident alien and has a permanent home.
Experts say that if Hogan is assessed at the highest marginal rate of 40% the tax office is likely to demand a base payment of $15 million, plus interest charges from the tax due date, and additional penalties that could be as high as 75% of the base bill.
The tax bill results from an ongoing probe by the Australian Crime Commission (ACC) into companies and individuals that allegedly have been channeling money into offshore tax havens.
We Told You So
I often get requests for my opinion and information about Australia as a destination for Americans and others looking for a foreign residence and second citizenship. My answer for some time now has been that citizenship laws have some attraction, but that Australia’s tax collectors have been brutal in their anti-tax haven, anti-offshore crusades.
For the past decade we have been reporting on the ACC witch hunt aimed at alleged offshore tax evasion. Tax collectors have offered rewards to informers, possible tax amnesties, and issued scores of search warrants aimed at possible evaders, especially the wealthy as well their accountants and attorneys.
Indeed these continuous highly publicized tax raids have raised serious civil liberties issues.
Crusading tax police have gone to the extreme lengths of raiding lawyers’ offices and wealthy person’s homes, grabbing files and computers. Leading wealthy citizens have been prime targets with lots of attendant tabloid publicity and what we American call “perp walks.”
Importance of Professional Advice
Hogan, 70, said he was “horrified” and “devastated” that his native country he promoted through his successful tourism ads was treating him so poorly.
Since 2005 Hogan, his artistic collaborator John “Strop” Cornell and their financial adviser, Tony Stewart, have been ATO targets of what is known in Australia as the Wickenby anti-tax haven investigation. All three have denied any wrongdoing and none has been charged with any tax offences
So Crocodile Dundee may remain a tax prisoner Down Under in the country he helped to make so famous.
His attorney said Hogan does not have the ability to pay the ATO bill and that “…the amount is more than he could put his hands on.” Hogan says he relied on professional advice from competent advisers and filed tax returns based on their advice.
Could It Happen to You?
I don’t know all the facts in this case, but it is obvious that the government of Australia (whichever party that turns out to be in control after the recent hung parliamentary election) is making a major public relations mistake. They could easily have settled the matter by negotiations without having to grab Hogan at his mother’s grave.
But this unfortunate story reinforces themes I have repeated over these many years – the importance of foreigners knowing before any move about the taxes in your intended nation, the impact on your home country taxes, about double taxation, tax treaties, the laws governing tax residence and tax domicile – and most important, obtaining competent, trust worthy professional tax and legal advice in both countries – well before you make your move.
If Paul Hogan had asked us I could recommend skilled tax and legal counsel in both Australia and the United States with whom the Sovereign Society works.
These are the kind of answers I provide for Sovereign Society members every day. Join us.
Other Posts from the Author
- Are You Among the 23% Entitled to a Second Passport? - May 14th, 2012
- The Real Problem With the French Elections - May 4th, 2012
- The Life of a “Sovereign Individual” - April 24th, 2012
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