If an offshore company or individual transfers money to you in Australia, it will likely be detected by AUSTRAC and referred to the ATO for investigation. The investigation will decide if the ATO asserts that tax is payable on the transfer of those funds. The onus is on the person receiving the funds (in Australia) to prove that there is no tax liability attached to the transfer of those funds. Many people receive money from offshore companies because it is easier at the sender’s end because some countries are stringently monitored and seek to prevent such transfers. However, it is problematic at this end and can trigger taxation. Stating reasons for the transfer such as ‘loans’ or ‘gifts’ will always be carefully examined. Such statements should not be made before receiving specialist advice because the ATO do not have to accept what you say if it cannot be proven by evidence.