Paul Hogan hit for millions as ATO demands its take

Posted: August 13, 2010 in Uncategorized

paul hogan

Paul Hogan as Crocodile Dundee. The tax bill is the first punitive action taken against the star by the ATO Source: Supplied

  • ATO accuses Paul Hogan of tax evasion
  • Claims tax not paid on $37.6m of income
  • Star says he was paying taxes in the US

PAUL Hogan has been hit with a multi-million-dollar tax bill, with the Australian Taxation Office accusing the entertainer of evading tax on $37.6 million of undeclared income.

The tax office has also told Hogan it considers him an Australian for tax purposes, despite the Crocodile Dundee star living and paying taxes in the US for a number of years.

The tax bill is the first punitive action taken against Hogan by the tax office, which along with the Australian Crime Commission has been pursuing the actor as part of a tax probe into the use of offshore accounts connected to the Wickenby investigation.

The size of the bill is not known. But if Hogan is assessed at the highest marginal rate of 40 per cent, the tax office is likely to have demanded a base payment of $15m, as well as interest charges from the date the tax was due, and additional penalties that could be as high as 75 per cent of the base bill.

According to documents obtained by The Australian, the tax office has told Hogan it is considering him an Australian resident for tax purposes for the years 1987 to 2005.

During eight of those years – from 1995 to 2002 – Hogan paid tax in the US, where he now permanently resides. From 2002 to 2005, Hogan lived in Australia.

Three payments are singled out as income that should have been declared to the tax office. The first is a $9.1m payment in July 2002, made at a time when Hogan had stopped being an Australian for tax purposes but had yet to take up US residency.

The tax office says Hogan did not pay tax in either country on this income. The reason for the payment is disputed, with some accounts saying it was for the film rights to the never-made Crocodile Dundee 4 and others for the rights to use Hogan’s likeness for commercial reasons.

The second payment was a dividend of $14.3m paid to Hogan in the same month. The third payment – also likely to have been from film royalties – was a $14.1m dividend paid to Hogan in June 2005, after he had again left Australia.

Tax advice given to Hogan by accounting firm Ernst &Young told the actor he would not have to declare the dividend if it was paid after he had left the country. But the tax office has told Hogan it considers him an Australian resident for the month and is demanding tax be paid.

Hogan’s artistic collaborator John Cornell and the pair’s financial adviser Tony Stewart have been accused in the Federal Court of lodging tax returns that contain “false and misleading statements”. The ACC alleges the statements were made to avoid their tax obligations and to “evade paying income tax in Australia.”

No tax-related charges have been laid against Hogan, Cornell or Mr Stewart, and all have denied any wrongdoing in relation to their tax affairs.

A lawyer for the ACCC has previously told the court it is close to finalising its investigation, which is separate to the tax office’s actions.

The ACCC will then decide whether to recommend criminal charges against Hogan, Cornell and Mr Stewart.

Come on ATO leave Hogie alone!

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s