Taxation Law - Is JITSIC about to Bite You?

Should you be wondering whether JITSIC is the name of a snarling dog behind your neighbour’s fence, rest assured it is a far more aggressive animal. The Joint International Tax Shelter Information Centre (“JITSIC”), taskforce, which is based in Washington DC and has recently also opened an office in London, has the prime responsibility in targeting abusive tax schemes and tax evasion.

Eradicating abusive tax schemes has risen to the top of the chain for revenue authorities, both domestically and internationally. Until now individual tax authorises have been functioning within their own precincts to combat tax evasion but with numerous tax minimization schemes functioning offshore and by electronic means it is progressively more complicated to trail offenders.

In an attempt to stop the flow of cross-border revenue losses, Australia, the UK, the US and Canada have united to launch an international taskforce which was formed in 2004 and like the neighbours dog it has now grown into a furious no holds’ barred animal.

JITSIC is focusing on tax sharing information between revenue authorities from each member country to identify abusive commodities, arrangements and the people promoting them. The taskforce is active in the US and UK bitting hard into the rump of avoidance schemes.

The consequences of JITSIC activities may unintentionally place and or disadvantage countries that come within its jurisdiction. By outlawing some of the tax incentives which JITSIC may deem to be avoidance it may create an “unfair playing field” for the member countries in the global trading sphere. 

Whilst on the surface JITSIC may fancy itself as an international “security guard” albeit a small portion of “international”, its role seems to be more directed to tax information sharing than tax administration and seems to reinforce the desire of the Australian Tax Office to combat cross border tax minimization practices and abuses.

The taskforce has delineated Multinationals and High Net Wealth Individuals as it’s primary target. Taxpayers should not be deterred from seeking advice from reputable tax advisors and pursuing legitimate tax planning, which minimize risk and maximize value to their operations, notwithstanding the snarls of JITSIC. For more information and for a comprehensive discussion on these matters and advice, please contact LAC Lawyers and ask for Mr Frank Egan.