High Court rules ATO can use information from data leaks
The ATO has been given permission to use information obtained from data leaks, even if leaked from a law firm.
The High Court has given the ATO the green light to use information obtained from data leaks, even if leaked from a law firm.
The decision on Wednesday in Glencore International v Commissioner of Taxation means that the ATO can continue to use the Paradise Papers and other similar data leaks.
Global commodity miner and trader Glencore was fighting to stop the Australian tax authorities using business information that was leaked as part of the so-called Paradise Papers, which included files that were taken from Bermuda-based Appleby law firm. Glencore argued that information revealed by the Paradise Papers should not be used by the authorities as it was stolen.
The ATO has, however, hailed the court’s decision, calling it a win for the Australian community, which cements the message that offshore law firms are not a cloak of invisibility to hide offshore arrangements.
“Today’s decision is not just a win for the ATO; it’s a win for the Australian community who rightly expect the ATO to use all information available to ensure large corporations and those who seek to hide money overseas are paying the right amount of tax,” said ATO second commissioner Jeremy Hirschhorn.
He argued that the information in question was already in the public domain, meaning the ATO “can’t just ignore it”.
“It would be a perverse outcome if the ATO and the courts were not allowed to take into account information that the public at large can access, or had to forget information that is known.
“The broader ramifications of this decision beyond Glencore are that the days of being able to hide money overseas are rapidly coming to an end — not only are foreign banks providing the ATO with details of Australians with offshore money, but taxpayers are only one data leak away from their entire affairs being exposed.”
Mr Hirschhorn clarified that this case was not about the ATO seeking to access legal advice; however, lawyers have raised concerns about the ramifications of the Glencore decision on the preservation of confidential communication.
“The critical importance of the case was confirming that the ATO can use leaked copies of documents like contracts, board minutes and banking details,” he said.
Mr Hirschhorn added: “We are working with key partners in the tax system to ensure that taxpayers can confidently continue to obtain high-quality independent legal advice on their tax affairs, but also that the ATO can appropriately review transactions without having critical evidence withheld.”