ATO grapples with big data in tax haven hunt

The Australian Tax Office is grappling with a “complicated and unstructured” trove of data as part of collaborative cross-border investigations into international tax dodging.

The project, involving tax authorities from Britain, the US and Australia, involves a 400 gigabyte cache of data collected from the three countries, according to the British tax office.

The initiative falls under the ATO’s Project Wickenby. Established in 2006, the cross-agency task force has recouped $691.9 million and prosecuted 35 individuals as of February this year.

There are currently nine criminal investigations underway. 

The ATO is legally allowed to share local tax information with other countries under the Double Tax Agreements and the Tax Information Exchange Agreements.

Australia has tax information exchange agreements with more than 30 countries.  

The ATO declined to provide detail on how or where the data was being stored and analysed, but said the system on which the data was being retained was not beholden to any one country.

“The data is being stored in a secure system – separately and not integrated to ATO or international partner agencies systems,” a spokesperson said.

“The data set is unstructured and complicated. A range of sophisticated analytical software is being used to interpret the data.”

It is understood the current investigation is focusing on individuals rather than businesses.

The local arms of global technology companies have come under fire recently for seemingly not paying enough tax.

The Government recently released a paper in which it approached industry for comment on whether the current use of international tax legislation posed risks to the local corporate tax base.

The paper highlighted “aggressive tax practices” of the likes of Google and Apple. Treasury found since the onset of the GFC, Australian companies have been paying 27 cents per dollar of profit compared to the statutory rate of 30 cents per dollar. 

Google paid $74,176 in tax off $201 million in revenue locally last year, a figure later disputed by the company which claimed its tax bill was closer to $781,471. Apple Australia paid $40 million in tax in 2012 on revenue of $6 billion. 

No ICIJ collaboration

The data under scrutiny by the three countries does not include records obtained by global tax haven project The International Consortium of Investigative Journalists, the ATO confirmed. The ICIJ is analysing 260GB of leaked data involving the world’s rich and powerful.

An ATO spokesperson said there appeared to be similarities between the two datasets but the agency hadn’t seen the ICIJ data.

The ICIJ is using free-text retrieval software from Sydney-based data indexing company Nuix and US-based dtSearch to analyse the data, with 2.5 million files spread across four databases. 

The ATO has so far placed two Australians under criminal investigation and has identified more 100 wealthy Australians who have set up offshore accounts, saving tens of millions of dollars in tax. 

Of those, 65 were identified as “high risk” after moving over $1 million in or out of the country without declaration.