On 3 August 2020, the Australian Financial Review posted an article written by its National Affairs Correspondent: Angus Grigg entitled: Tax haven residents hold $5.7 billion of cash in Australia. This information is a result of the ATO publishing non-secret aggregate data from recent information sharing reforms, between Revenue Authorities, which came out of the ‘base erosion and profit shifting world-wide imperative that gathered momentum several years ago.

See below for details.

[Tax Month – August 2020]



Residents of known tax havens held more than $5.7 billion of cash in Australian bank accounts, according to figures released for the first time, suggesting the local financial system remains vulnerable to money laundering and tax avoidance.

The data from the Australian Taxation Office has been made public as part of a global effort to crack down on those shifting assets offshore and seeking to avoid tax in their home countries.

The figures reveal residents of tax haven countries like the Cayman Islands or Tuvalu have substantially higher average balances in Australian bank accounts, compared to Germans or New Zealanders.

The most striking of these is the Marshall Islands, where 71 residents of the Pacific Ocean tax haven held $386 million in Australian bank deposits at the end of 2018 or an average of $5.4 million per account.

Resents of the Marshall Island and other tax havens hold $5.7 billion worth of deposits in Australia. Supplied

That’s around 120 percent of GDP for the tiny nation, whose main source of income is grants from the US government.

“There are some serious red flags in the data”, said Dr Mark Zirnsak, a spokesperson for the Tax Justice Network Australia, who has examined the deposits.

Dr Zirnsak said it was unlikely the accounts were held by those who actually lived in the Marshall Islands or other tax havens and said there was a risk they were owned by Australians who have moved their residency offshore.

“We remain concerned that governments of tax havens continue to be reckless in assisting people to transfer their nationality in ways that allow them to avoid paying tax where they have businesses”, said Dr Zirnsak.


The British Virgin Islands had the second highest average amount per account at $1.3 million, with 700 residents of the Caribbean tax haven holding deposits of $1.3 billion in Australia.

Tuvalu, with a population of just 11,500 people, had 140 account holders in Australia valued at $112 million. That’s around 200 per cent of GDP.

“We have been concerned for some time about cases of foreigners laundering the proceeds of crime or corruption through Australia,”said Dr Zirnsak.

“The Australian Government needs to ensure we do not become a safe haven for the profits of crime or those engaged in tax evasion.”

Overall, the data shows residents from 248 jurisdictions held 6.1 million bank accounts in Australian worth a total $208 billion.

The majority of this would be the legitimate holdings of foreign students or workers in Australia, although around 3 per cent of these funds come from residents of known tax havens.

The ATO made the data available after Australia legislated an OECD framework which allows for the sharing of information on bank accounts held by foreign nations.

Australian banks provide the data to the ATO based on deposits held at December 31 each year.

More than 100 countries have now signed up to the OECD framework with the aim of deterring those seeking to hide income from their local tax authorities.

Residents of the US, Britain and China were the three largest foreign deposit holders in Australia, accounting for a combined $122 billion or half the total.

The high average balances from tax havens is highlighted when comparing deposits by those from the Cayman Islands and Germany.

The data shows around 120,000 Germans hold accounts in Australia worth $1.6 billion, a similar amount to just 2,800 residents of the Cayman Islands.

The US State Department rated the Cayman Islands and the British Virgin Islands as “major money laundering jurisdictions” in 2019.

It said the Caymans was “susceptible to money laundering, primarily due to foreign criminal activity that may involve fraud, tax evasion, or drug trafficking.”

[AFR website: Tax Haven article]

Posted 3.8.20