Big Brother is watching: Data Matching & the ATO
Is Big Brother really watching? Ever wondered what the ATO knows? Look no further.
The following is a summary of the latest ATO data matching programs. Future blogs will deal specifically with each data matching program area in detail.
The ATO’s data-matching programs are designed to increase community confidence in the integrity of the tax system.
The ATO use the data to:
✔️help individuals and businesses understand their tax obligations, including registration, lodgment, reporting and payment
✔️protect honest businesses from unfair competition
✔️make it easier for individual taxpayers by pre-filling their returns
✔️assess the levels of voluntary compliance of individuals and businesses with their tax obligations
If the ATO check your information, it doesn’t automatically mean they think you are dishonest in your tax affairs. If the data doesn’t match, they will contact you to find out why
Please Note: If you haven't reported all your income, or if you have made a mistake with your tax records, you should correct the mistake or amend a return.
Specific data-matching programs
The ATO collect data from a range of sources to protect honest businesses. Specific data-matching programs allow them to conduct formal data matching without it being legislated. They do this by identifying businesses that:
✔️may not be reporting all their income
✔️operate outside of the system
✔️are operating, but are not lodging returns.
The data is used to understand trends and patterns in industries, including where they need to develop assistance products to help the community understand their tax obligations.
The ATO are currently undertaking specific data-matching activities in the following areas:
✔️Credit and debit cards
✔️Specialised payment systems
✔️Motor vehicle registries
Credit and Debit cards
The ATO obtain data from banks and financial institutions to identify the total credit and debit card payments received by Australian businesses. This is detailed in the credit and debit cards data-matching protocol.
The ATO don’t gather information about individual credit or debit card holders.
From 1 July 2017, these institutions will need to automatically report this information to the ATO annually
Specialised payment systems
The ATO obtain data on electronic payments made through specialised payment systems to Australian businesses. This data is analysed in conjunction with data collected through their credit and debit card data-matching program
The ATO obtain details of online sellers who sell goods and services to the value of $12,000 or more.
Data is obtained from online selling sites where the data owner or its subsidiary:
✔️operates a business in Australia that is governed by Australian law
✔️provides an online market place for businesses and individuals to buy and sell goods and services
✔️tracks the activity of registered sellers
✔️has clients whose annual trading activity amounts to $12,000 or more
✔️has trading activity for the years in focus.
The ATO obtain data from all ride-sourcing facilitators operating in Australia and their financial institutions to identify ride-sourcing drivers.
This information allows them to help drivers understand their tax obligations including registration, lodgment, reporting and payment obligations
Motor vehicle registries
The ATO obtain data from all the state and territory motor vehicle registering bodies to identify all motor vehicles sold, transferred or newly registered, where the transfer or market value is $10,000 or more.
The ATO obtain data from Australian cryptocurrency designated service providers (DSPs) to ensure people trading in cryptocurrency are paying the right amount of tax
Exchanging data with other Australian Government agencies
The ATO’s data-matching program identifies cases at risk of either:
✔️incorrect personal financial assistance payments
The ATO provide income information derived from tax returns to the Data-Matching Agency (DMA) – a separate agency within Centrelink – on a cyclical basis (up to nine cycles per year) on selected agency clients. This is used to determine the eligibility criteria for benefits and to help detect fraud within the welfare system.
Other data exchanges
The ATO exchange data with Department of Human Services (DHS) programs such as Centrelink and the Child Support Program, as well as other government agencies, such as the Department of Home Affairs under separate legislative provisions.
All information sourced from www.ato.gov.au. Please be aware: Information is updated on a constant basis and is current at the date of publishing only.