Hit musical targeted in Tax Office investigation

Sat August 4, 2012 12:02pm

The tax office is investigating whether there were deliberate attempts to avoid paying tax on the earnings from hit musical Dirty Dancing.

THE Australian Tax Office is investigating whether there were deliberate attempts to avoid paying tax on the massive earnings from the international hit musical Dirty Dancing, promoted by veteran music industry identities Kevin Jacobsen and his brother Col Joye.

Kevin Jacobsen confirmed to The Saturday Age that the ATO's Operation Wickenby taskforce began an investigation after he called the ATO to raise his concerns in March 2009.

He said he told the ATO he became concerned about the complex international structure used to funnel earnings offshore from the group's highly successful Dirty Dancing musical production. Mr Jacobsen signed the worldwide rights to produce the Dirty Dancing stage show in 2004.

Mr Jacobsen said he became aware there might be problems with the structure of the family empire after receiving an email from an external tax consultant, Page Harrison, warning the two families that the structure of certain overseas companies might be seen as a ''sham'' by the ATO.

''I contacted the ATO to separate myself from this practice at the time I became aware that I had a personal responsibility for my own tax,'' Mr Jacobsen said.

Mr Jacobsen said he has had a number of meetings with Project Wickenby and provided them with substantial documentation. He denies any involvement in any wrongdoing. A series of questions were put to Colin Jacobsen (known on stage as Col Joye) but he would not comment. The ATO also declined to comment.

The Jacobsens join a long list of entertainers that have been investigated by Project Wickenby, a joint operation between the Australian Federal Police and the Tax Office to target hidden tax havens. In the past seven years more than 60 people have been charged and 22 convicted, including high-profile music promoter Glenn Wheatley. The ATO offered an amnesty period until 2010.

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