Motor vehicle registries – 2013–14 to 2021–22 financial years data-matching program protocol

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Motor vehicle registries – 2013-14 to 2021-22 financial years data-matching program protocol.

• What the program protocol is about
• Why we look at motor vehicle registries data
• Program objectives
• How we use the data
• Public notification of the program
• Our lawful role
• How we undertake data matching
• Why we undertake data matching

What the program protocol is about

The Australian Taxation Office (ATO) motor vehicle registries data-matching program has been operating for 16 years in various iterations.

This protocol:

• consolidates the two existing motor vehicles registries data-matching programs  
  • 2013–14 to 2015–16 financial years program (published 16/12/2014)
  • 2016–17 to 2018–19 financial years program (published 13/04/2018) 
• outlines our intention to continue collecting motor vehicle registries data for the additional period of the 2019–20 to 2021–22 financial years.

The motor vehicle registries data-matching program has been developed to assess the overall tax compliance of individuals and businesses involved in buying and selling motor vehicles. We will match the data provided by state and territory motor vehicle registry authorities against ATO taxpayer records, with the intent of identifying those who are not participating in the tax and superannuation system by meeting their registration, reporting, lodgment and payment obligations.

Information will be acquired from state and territory motor vehicle registry authorities where their records indicate both:

• a vehicle has been transferred or newly registered during the 2019–20, 2020–21 and 2021–22 financial years
• the purchase price or market value is equal to or greater than $10,000. This threshold was determined by review of vehicle prices trends and cost/benefit assessment.

The data acquired will allow compliance checks of luxury car tax, fringe benefits tax and fuel schemes. It will also identify higher risk taxpayers with outstanding lodgments and those with undeclared income whose asset holdings may not be proportionate to their declared financial position.

Our data-matching programs follow the Office of the Australian Information Commissioner’s (OAIC) Guidelines on data matching in Australian Government administration (2014). The guidelines assist Australian Government agencies to use data matching as an administrative tool in a way that complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act), and are consistent with good privacy practice.

The ATO has responsibility to protect public revenue and to maintain community confidence in the integrity of the tax system. Our data-matching programs assist us to undertake these responsibilities.

Why we look at motor vehicle registries data

The motor vehicle registries data-matching program will allow us to identify and address tax risks, including:

• fringe benefit tax compliance activities
• providing a holistic view of a taxpayer's financial position
• supporting our compliance areas with modelling and case identification
• supporting taskforce programs including the shadow economy.

Note: The term ‘black economy’ has now changed to shadow economy. This change reflects the Organisation for Economic Co-operation and Development’s (OECD) definition of unreported or dishonest economic activity.

Program objectives

The objectives of this data-matching program are to:

• chiefly identify and address non-compliance with tax obligations
• obtain intelligence about taxpayers that buy and sell motor vehicles to identify risks and trends of non-compliance with tax and superannuation obligations
• identify and address taxpayers buying and selling motor vehicles who may not be meeting their obligations to register and lodge returns (including activity statements) and ensure the correct reporting of income and entitlement to both deductions and input tax credits
• use the motor vehicle purchaser’s data as an indicator of risk, along with other data holdings, to identify taxpayers that have purchased vehicles with values that are not commensurate with the income they have reported
• identify cases for investigation of taxpayers of interest, such as sellers, licenced dealers, fleet managers, leasing companies or representatives of these taxpayers to determine if the use of interposed proxy ownership is used to conceal the real accumulation of wealth, therefore representing a material threat to public revenue
• identify and deal with those taxpayers who may not have met their obligations primarily with regards to GST, fringe benefits tax, luxury car tax, fuel schemes and income tax
• promote voluntary compliance and strengthen community confidence in the integrity of the tax and superannuation systems by publicising the running of this data-matching program
• identify, educate or deal with those individuals and businesses who may be failing to meet their registration or lodgment obligations and assist them to comply.

How we use the data

We are seeking external data to cross-reference with our internal data holdings to identify relevant cases for administrative action.

Details will be requested from the state and territory motor vehicle registering authorities where their records indicate a vehicle has been transferred or newly registered during the identified financial years and the purchase price or market value is equal to or greater than $10,000. This threshold is consistent with earlier programs and was determined by review of vehicle price trends and cost/benefit assessment.

We will determine a tax compliance risk profile of taxpayers buying, selling or acquiring motor vehicles, which will provide us with information to:

• deliver products and tailored education strategies to support taxpayers in managing their tax obligations, and
• identify taxpayers at risk of not complying with their tax or superannuation obligations for referral to relevant areas for appropriate treatment.

In cases where taxpayers fail to comply with these obligations even after being prompted and reminded of them, escalation for prosecution action may be initiated.

Where a taxpayer is correctly meeting their obligations, the use of the data will reduce the likelihood of contact from us.

Our previous related programs

The continued collection of motor vehicle registries data will be used to support ongoing compliance checks for luxury car tax, fringe benefits tax and fuel schemes, as well as identifying higher risk taxpayers with outstanding lodgments and those with undeclared income.

The data is used in conjunction with other data sources in our risk detection models and profiling tools to generate compliance actions for tax officer review.

Data providers

The ATO is the matching agency and the sole user of the data obtained in the course of this data-matching program.

Data will be obtained from the following eight state and territory motor vehicle registry authorities:

Our formal information-gathering powers

The data will be obtained using our formal information-gathering powers contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.

This is a coercive power that obligates the data provider to supply the information requested. We will use the information for tax and superannuation compliance purposes.

Privacy Act

Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act and in particular both:

• APP6.2(b) – the use of the information is required or authorised by an Australian law
• APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for our enforcement-related activities.

Keeping data safe

The data-matching program will be conducted on our secure systems that comply with the requirements of:

• the Australian Government Information Security ManualExternal Link produced by the Australian Signals Directorate, which governs the security of government information and communication technology (ICT) systems
• the Australian Government Protective Security Policy FrameworkExternal Link, which provides guidance on security governance, personnel security, physical security and information security.

All ATO computer systems are strictly controlled according to Australian Government security standards for government ICT systems, with features including:

• system access controls and security groupings
• login identification codes and password protection
• full audit trails of data files and system accesses.

We will use our secure internet-based data transfer facility to obtain the data from source entities.

Data elements collected

Data will be collected from the state and territory motor vehicle registry authorities for the 2019–20, 2020–21 and 2021–22 financial years as follows:

• Details of the purchaser, seller, licenced dealer, fleet manager, leasing company (or representative of any of these) and the registering person for an unincorporated body, including  
  • Name – individual
  • Name – business (legal and trading)
  • Address (including postcode) – residential, business (for legal notices), postal (for renewals)
  • Date of birth – (individuals)
  • Contact phone number
  • Australian business number (if applicable)
  • Australian company number (if applicable)

Based on experience from previous motor vehicle registries data-matching programs, the majority of transactions involve only a single seller and single buyer.

Transaction details, including: 

• date of transaction
• type of transaction (for example, new registration, transfer)
• sale price of the vehicle
• market value of the vehicle
• vehicle’s garage address
• type of intended vehicle use (for example, private, business)
• vehicle make
• vehicle model
• vehicle body type
• year of manufacture
• engine capacity or number of cylinders
• tare weight (unladen weight)
• gross weight (gross vehicle mass and/or gross combination mass)
• vehicle identification number (chassis number)
• registration number
• transaction receipt number
• state stamp duty exemption (yes or no)
• reason for stamp duty exemption
• dealer’s licence number.

More information can be found by accessing the Data dictionary

Number of records

The number of individuals affected by this data collection is expected to be approximately 1.5 million each financial year.

Data quality

We anticipate that the data quality will be of a high standard based on our prior motor vehicle data-matching programs.

Data is transformed into a standardised format and validated to ensure that it contains the required data elements prior to loading to our computer systems. We undertake program evaluations to measure effectiveness before determining whether to continue to collect future years of data or to discontinue the program.

To assure data is fit for consumption and maintains integrity throughout the data-matching program, it is assessed against the 11 elements of the ATO data-quality framework:

• accuracy
• completeness
• consistency
• currency
• precision
• privacy
• reasonableness
• referential integrity
• timeliness
• uniqueness
• validity.

Data retention

The collection of data under this program includes all financial years from 2013–14 financial year to 2021–22 financial year. The data collection is annual following the end of each financial year.

The collection of 2013–14 to 2015–16 financial years data under the original program was conducted between October 2014 and May 2017. The ATO was granted exemption by the Privacy Commissioner in 2014 to retain the 2013–14 to 2015–16 data for three years, then in 2019 for a further two years.

The collection of 2016–17 to 2018–19 financial years was conducted between May 2018 and January 2020. The ATO was granted exemption by the Privacy Commissioner in 2018 to retain the 2016–17 to 2018–19 data for three years.

Our exemption requests for retaining the 2013–14 to 2018–19 data were required to satisfy the National Archives of Australia's General Disposal Authority 24 (GDA24) – Records relating to data matching exercises. GDA24 has now been revoked; as such further exemption requests will not be required.

We will destroy data that is no longer required, in accordance with the Archives Act 1983, the records authorities issued by the National Archives of Australia, both general and ATO-specific.

We will retain each financial year’s data for five years from receipt of the final instalment of verified data files from the data providers. The data is required for this period for the protection of public revenue as:

• The discrepancy matching that occurs under parts of this program is iterative in nature (for example, one discrepancy match may be used in subsequent and different matching processes) – this process can typically occur over multiple financial years.
• Retaining data for five years supports our general compliance approach of reviewing an assessment within the standard period of review, which also aligns with the requirements for taxpayers to keep their records.
• The data is also used in multiple risk models, including models that establish retrospective profiles over multiple years.
• Retaining the data for five years will support our ability to conduct longer term analysis of the risks associated with asset accumulation.