Some relevant background facts
11 Mr Huang is a citizen of the PRC.
12 Mr Huang has been conducting business in the PRC since the 1980s. The Huang family's business focusses on property development and investments in various industries. In 2006 Mr Hunag established the Shenzhen Yuhu group of companies. According to a response to a request for information prepared by KPMG on his behalf in February 2017, he accumulated "significant personal wealth" in the PRC before moving to Australia in 2013. The KPMG response indicated that Mr Huang continued to exercise a significant measure of ownership and/or control over 10 corporate entities in the PRC and owned 100% of three Hong Kong based companies, although he asserted that none of those three entities had ever traded.
13 The evidence disclosed that from April 2011, Mr Huang was appointed a director of 20 Australian companies. He was also an appointor or beneficiary of a number of Australian resident trusts.
14 The records of the Huang Family Trust show that as at 30 June 2018 loans owing to the Huang Family Trust exceeded $165 million. While the last recorded creditor is named only as "unitholder", the previous recorded creditor in an amount of over $108 million, is named as Mr Huang. Information acquired during the course of the audit indicates that that debt was not repaid. The loans appear to have been made to some of those Australian companies and trusts. The financial statements for the Austrump Family Trust, for example, record a loan from Mr Huang of nearly $12 million.
15 Mr Huang has cash in numerous accounts with several Australian and overseas banks. The present value of those accounts, however, is currently unknown.
16 Mr Huang also has substantial real estate holdings.
17 On 31 March 2007 he acquired a property in Hong Kong with an estimated value of HKD25,861,500 (approximately AUD3,711,311). On 18 September 2015 he purchased a unit in Chatswood, NSW with an estimated value of $3,428,258. On 14 April 2016 he purchased a house in Chatswood, NSW with an estimated value of $3,275,128. As far as the evidence shows, none of these properties is subject to a mortgage.
18 According to his last income tax return lodged with the ATO on 13 December 2018 he last resided in Australia at a property in Bay Street Mosman, NSW (the Mosman property). The Mosman property was purchased in the name of Mrs Huang for the sum of $12,800,000. Settlement took place on 29 January 2013. It is unencumbered.
19 In addition to the Mosman property, Mrs Huang is also the owner of a property in Hong Kong which she purchased in about December 2018 for the amount of HKD520,000,000 (approximately AUD96,000,000). This, too, is apparently unencumbered.
20 In January 2016 the Deputy Commissioner began a comprehensive risk review of Mr Huang's taxation affairs, covering the three income years ending 30 June 2013, 30 June 2014 and 30 June 2015. On 4 October 2017 the risk review was escalated to an audit.
21 On 18 March 2016, after the risk review had started, Mr Huang resigned as a director of one of the Australian companies. On 16 January 2018, after the audit had started, he resigned as a director of another. On 12 November 2018, while the audit was still under way, he resigned as a director of 16 of the Australian companies and on 20 December 2018 he resigned as a director of another. So by 21 December 2018, Mr Huang had removed himself as a director of all but one of the Australian companies.
22 On 9 March 2019, by consent, Mr Huang was removed as a beneficiary of the Huang Family Trust, the Yuhu Investment Trust, the Austrump Family Trust, and the 626 Family Trust. The same day he was also removed by consent as the appointor of the last three of those trusts.
23 As I have already noted, Mr Huang left Australia for the PRC on 4 December 2018. The following day his visa was cancelled pursuant to s 128 of the Migration Act 1958 (Cth). On 18 December 2018 he withdrew an application he had made for Australian citizenship. The evidence indicates that he has not made any application for the issue of a new visa. It is likely that he now resides in Hong Kong.
24 AUSTRAC records show that between January 2016 and August 2019 Mr Huang transferred tens of millions of dollars into and out of Australia. That evidence shows a substantial excess of monies going out compared to monies coming in. It also shows that the amount of money transferred out of Australia since December 2018 exceeds the amount coming in by $46,749,253, nearly twice as much as the previous year.
25 The tax assessment notices were issued on 11 September 2019 at the same time the Deputy Commissioner issued reasons for her decisions. The due date for payment is 7 October 2019.
26 On 13 September 2019, a certificate under s 255-45 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA) was issued by the Commissioner through his delegate. The certificate was signed by Melinda Smith, Deputy Commissioner of Taxation and delegate of the Commissioner of Taxation. It specified that Mr Huang had a tax-related liability as a result of a number of amended and other assessments listed in the notice, that certain specified notices were or were taken to have been served on him, and that he has a debt of $140,925,953.98 due to the Commonwealth as a tax related liability. A tax-related liability is defined in the TAA to mean "a pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)".
27 Upon service of the tax assessment notices, the Deputy Commissioner caused 39 notices to be issued under s 260-5 of the TAA. The recipients include Mrs Huang, Jiquan Huang (the son of Mr and Mrs Huang), Australian banks, and Australian companies and trusts with which Mr Huang was or remains involved. A s 260-5 notice is a statutory garnishee notice issued by the Commissioner to a third party who owes or may later owe money to a debtor.
28 Based on his experience working in this area, Mr Deng is concerned that, upon being informed of the substantial amounts of tax, penalties and interest to which Mr Huang has now become liable, Mr Huang and his wife may take steps to encumber or otherwise dispose of their assets and thereby frustrate the Deputy Commissioner's proceedings for the recovery of the tax liability. In particular, he is concerned that the capacity of the Deputy Commissioner to recover the amounts due would be compromised for the following reasons.
29 First, by "grossly understating" income he received for the 2013 to 2015 income tax years, Mr Huang has evinced an intention not to pay income tax.
30 Second, Mr Huang's financial affairs are complex and his assets and those held in the name of his wife "are amenable to being encumbered or disposed of before there could be any real investigation into [the] availability of those assets to satisfy [the Deputy Commissioner's] prospective judgment".
31 Third, Mr Huang's primary business interests and wealth exist outside Australia and the Commissioner may be delayed or hindered in taking recovery action outside Australia, assuming that course is available.
32 Fourth, Mr Huang has demonstrated an ability to quickly move large sums of money outside Australia.
33 Fifth, the substantial size of the tax debt, in combination with the cancellation of Mr Huang's visa, gives him and his wife a significant incentive to dissipate assets or encumber them and to remove property from Australia.
34 Mr Deng also deposed that a prospective judgment obtained against Mr Huang was unlikely to be enforceable in either mainland China or Hong Kong. He stated that, although he was aware from the Council of Europe's website that the PRC and Hong Kong were parties to the Convention on Mutual Administrative Assistance in Tax Matters, he was also aware that:
[I]n the instrument of ratification deposited with the Secretary General of the OECD, on 16 October 2015, with respect to Article 30, paragraph 1.b, of the Convention, the People's Republic of China reserved that it shall not provide assistance in the recovery of tax claims, or in conservancy measures, for all taxes. (The period covered is 01/02/2016 - present).
35 Moreover, with respect to Hong Kong, Mr Deng said that, by a letter from the Chinese ambassador to France dated 28 May 2018, registered at the Secretariat of the OECD on 29 May 2018, the Government of the PRC declared that the reservation made by the PRC shall apply to Hong Kong.