Meet the Chinese billionaire who owes the ATO $140 million

Chinese billionaire Huang Xiangmo is in debt to the Australian Taxation Office to the tune of $140 million – but the office is powerless to freeze his offshore assets.

The wealthy real estate developer owes the ATO more than $81.28 million in income tax, $18.68 million in interest and $40.64 million in penalties totalling $140.6 million, according to Federal Court documents.

In December last year, the Federal Court made orders to freeze Huang’s local and overseas assets and to disclose his global assets to the tax man.

But after Huang made an appeal on a separate decision to freeze his overseas assets, the Full Court of the Federal Court overturned the order and said the ATO could not freeze his overseas assets, reported SMH.

Huang had “substantial assets in the People’s Republic of China (PRC) and in Hong Kong”, said Justices Anthony Besanko, Thomas Thawley and Angus Stewart.

But there was “no realistic possibility that the Deputy Commissioner [of Taxation]’s judgment debt would be enforceable in the PRC or Hong Kong”, they added.

Huang is still able to transfer his assets from Australia to Hong Kong and China.

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Justice Anna Katzmann made the original September 2019 order to freeze Huang’s local assets of Huang and his wife, which includes a $13 million Mosman mansion and a Chatswood apartment held in his wife’s name.

According to Katzmann, the businessman had “a significant incentive to dissipate assets or encumber them and to remove property from Australia”.

“The amount of the tax liability is considerable and there is a real danger that, without the freezing orders, assets will be removed from Australia or otherwise dissipated,” she said in her judgement.

He has also “demonstrated an ability to quickly move large sums of money outside Australia”.

Huang’s Australian permanent residency visa was cancelled on 5 December 2018 over security concerns about Huang’s links to the Chinese Communist Party and he has lived in Hong Kong since.

According to an SCMP report from February 2019, the Administrative Appeals Tribunal’s (AAT) public database reveals Huang had not filed for an appeal of the decision to revoke his visa, though an AAT spokesperson said some matters may not be filed publicly.

An ATO spokesperson told Yahoo Finance it could not comment on the tax affairs of individuals or entities due to obligations of confidentiality under the law.

Most of the $140 million owed to the ATO relates to the sale of a Hong Kong mansion which the ATO believes incurs a capital gains tax liability, as well as other smaller “unexplained” bank account deposits.

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