Earlier this year, the German state of North Rhine-Westphalia announced that it had acquired data stolen from banks in Switzerland by a former HSBC employee.

Damian O’Connor, special counsel in HopgoodGanim’s taxation and revenue team, said it’s likely the ATO will have access to this data to identify Australians who may have money in Swiss bank accounts.

“The ATO has already used similar European data in 2008 - originally stolen by a bank employee who sold it to the German federal intelligence agency for €4 million.

“While it’s not illegal for Australians to hold money or assets overseas, if they don’t disclose the income derived from those assets to the ATO, they may face criminal prosecution.”

O’Connor said the ATO has a wide range of powers to collect information on taxpayers, and these powers are not limited to information sourced overseas.

“Taxation law says that the ATO has the right of full and free access to all buildings, places, books, documents and other papers for the purposes of enforcing tax law. There are few legislative restrictions on this power, and the ATO does not need to believe that tax fraud or evasion has been committed before these powers can be used. It doesn’t even need a search warrant.”

He said that this unrestricted right of access effectively means that taxpayers have very limited legal remedies to stop the ATO accessing their information, even if the ATO doesn’t have any reason to believe that the correct amount of tax has not been paid.

“The enormous volume of information the ATO holds, stolen or otherwise, will inevitably mean that people will be put under the spotlight.”