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  • Real Property Transactions - 20 September 1985 to 30 June 2017 data matching program protocol

    At a glance

    This protocol has been prepared to meet the requirements of the Guidelines on Data Matching in Australian Government Administration 2014 (Guidelines) published by the Office of the Australian Information Commissioner (OAIC).

    We uses property transaction data from the state and territory revenue and land title authorities to assist taxpayers in meeting their capital gains tax (CGT) and other taxation obligations. This is achieved through prefilling income tax returns, educational strategies and compliance activities. We have conducted this program for more than 12 years, since property transfer data matching first commenced in 2005 as state and territory based exercises under the CGT Compliance Challenge.

    Disposal of a property may trigger a CGT event. This can occur after an asset has been held for many years. To determine a CGT liability real property transaction history dating back to 20 September 1985 (the introduction of the CGT regime) is required. Collecting data back to 1985 does not change our general compliance approach of reviewing CGT events within the standard period of review.

    In the 2013–14 Federal Budget the government announced it would legislate to make the reporting of property transfers to the ATO mandatory. Legislation enacted in Tax and Superannuation Laws Amendment (2015 Measures No. 5) Bill 2015 with the reporting regime commencing from 1 July 2016. Property transfers that occur after this date will be reported under the legislative regime.

    The 2016-17 financial year is the last collection year for the real property data matching program. The data acquired under this data matching program will continue to be required until all properties have been transferred within the legislative reporting regime, potentially upwards of 60 years.

    This data matching protocol has been amended from the version published in December 2015 to extend the timeframe for retention of Property transfer data, which will now be reviewed on a rolling basis at intervals of no longer than seven years. Each review will determine whether a new request to extend the exemption is required.

    Additionally, we will no longer acquire Rental bond data under this program protocol. A separate rental bond data matching protocol will be developed in accordance with the Guideline for any programs wanting to acquire data from the state and territory rental bond authorities to identify properties that are income producing.

    Program objectives

    The objectives of the real property transactions data matching program are to:

    • promote voluntary compliance and strengthen community confidence in the integrity of the taxation and superannuation systems and other programs administered by the ATO
    • obtain intelligence about the acquisition and disposal of real property and identify risks and trends of non-compliance across the broader compliance program
    • identify a range of compliance activities to address risks with real property transactions by taxpayers and others that are required to notify the ATO of dealings in real property
    • work with real property intermediaries to obtain an understanding of risks and issues as well as trends of non-compliance
    • support compliance strategies to minimise future risks to revenue
    • ensure compliance with registration, lodgment, correct reporting and payment of taxation, superannuation and other obligations.

    How the data will be used

    The data collected under this program will be compared with information included in tax returns. We will match this data against our records and other data we hold to identify taxpayers that may not be meeting their registration, reporting, lodgment and/or payment obligations.

    The data will also support client engagement and voluntary compliance through initiatives such as education and pre-filling information in tax returns.

    Learn more about what we will do before amending a return.

    Previous/Pilot programs

    This is an ongoing data matching program that we have conducted since 2005.

    During the 2016-17 financial year, we identified over 5,431 cases where real property dealings were not treated correctly and which raised an additional $65 million in revenue. This demonstrates the effectiveness of this program in protecting public revenue.

    Data related matters

    Data matching and user agency

    We are the matching agency and the sole user of the complete data set obtained in the course of this data matching program. The data matching program will be conducted on our secure systems in accordance with approved policies and procedures.

    In very limited and specific circumstances we may be permitted by law to disclose individual records to other government agencies. In some permitted circumstances this may include de-identified data.

    Learn more about our on-disclosure provisions.

    Data providers

    Data will be obtained from the following data providers:

    • New South Wales Office of State Revenue
    • New South Wales Department of Finance & Services – Land & Property Information
    • Victorian State Revenue Office
    • Australian Capital Territory Environment & Planning Directorate
    • Australian Capital Territory Office of Regulatory Services (Land Titles Office)
    • (Northern) Territory Revenue Office
    • Northern Territory Department of Lands, Planning and the Environment
    • Queensland Office of State Revenue
    • Tasmanian Department of Primary Industries, Parks, Water & Environment
    • Tasmanian State Revenue Office
    • Revenue SA
    • South Australian Department of Planning, Transport & Infrastructure – Land Services Group
    • Western Australian Office of State Revenue
    • Western Australian Land Information authority (Landgate)

    We have removed the state and territory rental bond authorities from the data providers listing as we will no longer be acquiring Rental bond data under this program protocol.

    Data elements

    We will obtain the following information from the data providers for the period 20 September 1985 to 30 June 2017.

     

    Date of property transfer

    Full street address of the property transferred

    Municipality identifier of the property transferred

    Property sale contract date

    Property sale settlement date

    Property land area

    Property sub-division date

    Total property transfer price

    Land usage code

    Transferor’s full name

    Transferor’s full address

    Transfer property share percentage and manner of holding

    Transferor’s date of birth

    Transferor’s Australian Company Number (ACN) or Australian Business Number (ABN)

    Transferee’s full name

    Transferee’s full address

    Transferee’s property share percentage and manner of holding

    Transferee’s date of birth

    Transferee’s ACN or ABN

    Land tax and applicable exemption details

    Purchase duty and applicable exemption details

    Valuation details

     

     

    We have removed the data elements previously provided by the state and territory rental bond authorities as we will no longer be acquiring Rental bond data under this program protocol.

    Number of records

    It is estimated that we will match records relating to over 2 million individuals each year of this program.

    Data quality

    We have worked extensively with the data providers since the inception of this data matching program and are confident the data will continue to be of high quality.

    State and territory laws require all property transfers to be recorded so that the appropriate stamp duty can be calculated and the correct legal entity is recorded as owning the property on title deeds. The states and territories must maintain high quality data as there are legal ramifications that may impact on a number of external bodies such as banks (where title deeds are sought as collateral) and municipal councils (in application of rates notices) if ownership is not recorded correctly.

    Data will be transformed into a standardised format and validated to ensure that it contains the required data elements prior to loading to our computer systems.

    Learn more about:

    Data retention

    The collection of data under this program will occur quarterly, with the final quarter's data obtained in August/September 2017.

    We are seeking to have the Information Commissioner exercise his discretion and allow the ATO to vary from the data destruction requirements contained in the Guidelines.

    We are seeking to extend the timeframe for retention of this data, with a review on a rolling basis at intervals of no longer than seven years. The retention of this data is required for the protection of public revenue. We were previously granted a single exception of five years.

    Destroying the data in the timeframes contained in the Guidelines would hinder our ability to protect public revenue as it would impact our capability to correctly determine capital gains tax liabilities where the property purchase was prior to the commencement of the legislative reporting regime of 1 July 2016.

    See the submission to the Information Commissioner setting out the basis for seeking the variation to the data destruction guidelines and its impacts on individual privacy.

    We destroy information that is no longer required in accordance with the Guidelines and the National Archives of Australia's General Disposal Authority 24 - Records relating to Data Matching Exercises (GDA24).

    Public notification of the program

    We undertook public notification of our intention to commence this program by:

    • publishing a notice in the Federal Register of Legislation - Gazettes on 8 December 2015.
    • publishing our original data matching program protocol and updating with amendments in December 2017 on our website at www.ato.gov.au/dmprotocols
    • advising data providers they
      • should notify their clients of their participation in this program and provide written materials to assist with this
      • should note that personal information is disclosed to the ATO for data matching purposes in their privacy policies.
       

    Gazette notice content*

    Commissioner of Taxation

    Notice of a data matching program

    The Australian Taxation Office (ATO) will acquire details of real property transactions for the period 20 September 1985 to 30 June 2017 from the following sources:

    • New South Wales Office of State Revenue
    • New South Wales Department of Finance & Services – Land & Property Information
    • New South Wales Office of Fair Trading – Rental Bond Board
    • Victorian State Revenue Office
    • Residential Tenancies Bond Authority – Consumer Affairs Victoria
    • Australian Capital Territory Environment & Planning Directorate
    • Australian Capital Territory Office of Regulatory Services (Land Titles Office)
    • (Northern) Territory Revenue Office
    • Northern Territory Department of Lands, Planning and the Environment
    • Queensland Office of State Revenue
    • Queensland Residential Tenancies Authority
    • Tasmanian Department of Primary Industries, Parks, Water & Environment
    • Tasmanian State Revenue Office
    • Tasmanian Department of Justice
    • Revenue SA
    • South Australian Department of Planning, Transport & Infrastructure – Land Services Group
    • Western Australian Office of State Revenue
    • Western Australian Land Information authority (Landgate)

    The data items that will be obtained are:

    Rental Bond Authorities

    • Rental bond number of identifier for rental bond
    • Unique identifier for the landlord
    • Full name of the landlord
    • Full address of the landlord
    • Date of birth of the landlord
    • Contact telephone numbers for the landlord
    • Unique identifier of the managing agent
    • Full name of the managing agent
    • Full address of the managing agent
    • Unique identifier of the rental property
    • Full address of the rental property
    • Period of lease
    • Commencement and expiration of the lease
    • Amount of rental bond held
    • Number of weeks the rental bond is for
    • Amount of rent payable for each period
    • Period of rental payments (weekly, fortnightly, monthly)
    • Type of dwelling
    • Number of bedrooms

    Revenue and land title authorities

    • Date of property transfer
    • Full street address of the property transferred
    • Municipality identifier of the property transferred
    • Property sale contract date
    • Property sale settlement date
    • Property land area
    • Property sub-division date
    • Total property transfer price
    • Land usage code
    • Transferor’s full name
    • Transferor’s full address
    • Transferor’s share percentage and manner of holding
    • Transferor’s date of birth
    • Transferor’s Australian Company Number (ACN) or Australian Business Number (ABN)
    • Transferee’s full name
    • Transferee’s full address
    • Transferee’s property share percentage and manner of holding
    • Transferee’s date of birth
    • Transferee’s ACN or ABN
    • Land tax and applicable exemption details
    • Purchase duty and applicable exemption details
    • Valuation details

    It is estimated the total number of records that will be obtained is:

    • Rental bond authorities – approximately 1 million records for each year
    • Revenue and land title offices – approximately 30 million records for each year

    Based on current data holdings it is estimated that records relating to 11.3 million individuals will be matched.

    The purpose of this data matching program is to ensure that taxpayers are correctly meeting taxation and other program obligations administered by the ATO in relation to their dealings with real property. These obligations include registration, lodgment, reporting and payment responsibilities.

    The objectives are to:

    • obtain intelligence about the acquisition and disposal of real property and identify risks and trends of non-compliance across the broader compliance program
    • identify a range of compliance activities appropriate to address risks with real property transactions by taxpayers
    • work with real property intermediaries to obtain an understanding of the risks and issues, as well as trends of non-compliance
    • gain support and input into compliance strategies to minimise future risk to revenue
    • promote voluntary compliance and strengthen community confidence in the integrity of the tax system by publicising the outcomes of the data matching program
    • ensure compliance with registration, lodgment, correct reporting and payment of taxation and superannuation obligations.

    A document describing this program has been prepared in consultation with the Office of the Australian Information Commissioner. A copy of this document is available:

    The ATO complies with the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014) which includes standards for data matching to protect the privacy of individuals. A full copy of the ATO’s privacy policy can be accessed at www.ato.gov.au/privacy

    * published in December 2015, as outlined throughout this amended protocol we are no longer acquiring information from Rental Bond Authorities. We will also provide a copy of this amended program protocol to the Office of the Australian Information Commissioner as required by the Guidelines.

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    Legal matters

    Learn more about:

    Submission to the Information Commissioner

    Varying from the data destruction requirements

    The Australian Taxation Office (ATO) is seeking approval for the real property data matching program for the period 20 September 1985 to July 2017 to deviate from one or more of the conditions detailed in Guideline 7 of the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration 2014 (the Guidelines).

    We are initially seeking to extend the retention period to seven years from the original five year extension granted by the Australian Information Commissioner in December 2015. We will undertake a review at at the seven year anniversary to determine whether the extension should be renewed. The data will continue to be necessary until all properties contained in the data set have been transferred within the mandatory reporting regime. We will conduct a rolling review of the ongoing data requirements at intervals of no longer than seven years.

    We consider exemption from the normal data destruction rules in this circumstance is in the public interest (10.1(c) of the Guidelines) as:

    • the ATO is responsible for the administration of the CGT regime
    • CGT legislation requires the establishment of a cost base to determine an individual’s taxation liability upon disposal of real property assets
    • The Commonwealth government enacted legislation for mandatory reporting of property transactions to the ATO commencing 1 July 2016, however the historical data captured under this program will be required on an ongoing basis for cost base calculations when a real property asset is disposed of
    • individuals may retain real property for many years, at times their whole life, before disposing of it and potentially triggering a capital gains event
    • To determine CGT liabilities, real property transfer history dating back to 20 September 1985 (the introduction of the CGT regime) is required until all properties have been reported under the new legislative reporting regime
    • This real property transfer data set is static and no future years are to be added. If we deleted the data earlier than requested, it would necessitate seeking to acquire the same data set again, imposing unnecessary costs on data providers and the ATO
    • The real property transfer data enhances our analytics capability and assists individuals to comply with their taxation obligations through prefilling alert services.

    The destruction of the historical data would:

    • limit the effectiveness of the legislative real property transaction regime
    • restrict the ATO’s prefilling alert service and our ability to assist individuals to comply with their obligations
    • inhibit the ATO’s ability to identify those taxpayers who may be subject to administrative action, and
    • result in a loss of government revenue.

    This program will continue to be subject to an evaluation within three years and every three years after which remains consistent with the requirements of Guideline 9. Every second evaluation cycle will include an assessment of whether the data is no longer required or whether the request to retain the data should be renewed.

    We have determined that this variation will not affect the privacy of an individual.

    Additional information justifying this variation is included in the tables below:

    • Table 1 – Matters considered in accordance with 10.2 of the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014)
    • Table 2 – Consistency with the requirements of the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014).

    The Commissioner of Taxation does not request that this advice be kept confidential (Guideline 10.6) and has no concerns with the Office of the Australian Information Commissioner placing the information on its website.

    Table 1: Matters considered in seeking this variation to the Guidelines

    Matter considered

    Consideration

    10.2.a

    The effect of not abiding by the specified requirements of the Guidelines would have on individual privacy

    • Retaining data for a period of seven years will not increase the risks to an individual’s privacy. We have in place very secure processes for handling and storing data. The data is stored on our secure computer systems where access is strictly controlled and full audit logs maintained
    • The ATO and our staff operate under stringent confidentiality and privacy legislation that prohibits the improper access to or disclosure of protected information. These obligations are supported by significant penalties, including imprisonment. This substantially mitigates the risks of breaches of privacy.
     

    10.2.b

    The seriousness of the administrative or enforcement action that may flow from the data matching program

    • An extension of the retention period will not affect the seriousness of the administrative action that may flow from the match, but will assist in detecting non-compliance or taxation fraud
    • Where we propose to take administrative action where a taxpayer may have reported incorrectly, we differentiate between those that try to do the right thing and those that set out to deliberately avoid their obligations. Documented procedures, including the Taxpayers’ Charter and compliance model are followed to ensure fairness and consistency.
     

    10.2.c

    The effect that not abiding by the specified requirements of the Guidelines would have on the fairness of the program – including its effect on people’s ability to find out the basis for decisions that affect them and their ability to dispute those decisions

    • There will be no effect on the fairness of the program or the ability of taxpayers to find out the basis of decisions that impact them or their ability to dispute those decisions
    • Before any administrative action is undertaken, taxpayers will be given at least 28 days to verify the accuracy of the information that has been derived from this data matching program
    • Where administrative action is to be undertaken, we will adhere to the principles established in the Taxpayers’ Charter and compliance model to ensure an equitable and consistent approach is taken
    • If a taxpayer does not agree with an assessment, they maintain the right to dispute the decision. They also have the legal right to appeal against those decisions through tribunals and the courts.
     

    10.2.d

    The effect that not abiding by the specified requirements of the Guidelines would have on the transparency and accountability of government operations

    • There will be no adverse effects on the transparency and accountability of government operations
    • A program protocol is submitted to the Office of the Australian Information Commissioner and we will strictly adhere to the commitments in that document
    • We will publish a notice with general information about the program in the Federal Register of Legislation - Gazettes before administrative action commences. We also make a copy of the program protocol available on our website.
     

    10.2.e

    The effect that not abiding by the specified requirements of the Guidelines would have on compliance of the proposed program with the Australian Privacy Principles in the Privacy Act 1988

    • There will be no effect on compliance with the Australian Privacy Principles contained in Schedule 1 to the Privacy Act 1988 due to longer retention of the data. The data is collected solely for the stated objectives established in the data matching program protocol.
     

    10.2.f

    The effect that abiding by all of the requirements of the Guidelines would have on the effectiveness of the proposed program

    • The effectiveness of the program would be reduced if the data retention period is not extended
    • There would be a significant reduction in our ability to detect incorrect reporting and taxation fraud without assessing trends in the data collected
    • The destruction of the data in accordance with the current guidelines would impact the integrity of the taxation system by:
      • limiting our ability to identify taxpayers who may be subject to administrative action
      • resulting in the loss of revenue.
       
     

    10.2.g

    Whether complying fully with the Guidelines could jeopardise or endanger the life or physical safety of information providers or could compromise the source of information provided in confidence

    • Not abiding by all the requirements of the Guidelines would not influence or affect the personal safety of any individual identified as part of the program or compromise the source of the information provided in confidence.
     

    10.2.h

    The effect that abiding by all the requirements of the Guidelines would have on public revenue – including tax revenue, personal benefit payments, debts to the Commonwealth and fraud against the Commonwealth

    • Not allowing the variation to the data retention period of the current program would cause us to miss potential breaches of taxation laws and subsequent non-payment of tax. This would result in the Commonwealth foregoing taxation revenue
    • There are risks to the integrity of taxation system when people fail to comply with their obligations. Abiding by all of the requirements of the guidelines will reduce the effectiveness of the proposed compliance activity. We would miss the opportunity to educate those taxpayers trying to do the right thing, and deter those that are non-compliant from repeating the behaviour
    • The effect of abiding by all of the requirements in the guidelines could negatively impact both public revenue and the confidence the public and government have in the ATO as an administrator of the taxation system. People not complying with their taxation obligations, including those operating outside the system, set a bad example to compliant taxpayers and may encourage their non-compliance. Maintaining community and government confidence in the taxation system is critical to our ongoing role.
     

    10.2.i

    Whether abiding by all of the requirements of the Guidelines would involve the release of a document that would be an exempt document under the Freedom of Information Act 1982

    • Upon receipt of a freedom of information request only information relating to the taxpayer’s own affairs will be released to the taxpayer concerned.
     

    10.2.j

    Any legal authority for, or any legal obligation that requires, the conduct of the proposed data matching program in a way that is inconsistent with the Guidelines

    • There is no specific legislative power authorising the conduct of this program inconsistent with the Guidelines
    • The Commissioner of Taxation, or his authorised representative, has formed the opinion that this data is required to enable us to effectively and efficiently carry out its legislated functions under the general powers of administration contained in:
      • Section 3A of the Taxation Administration Act 1953
      • Section 8 of the Income Tax Assessment Act 1936
      • Section 1-7 of the Income Tax Assessment Act 1997
      • Section 356-5 in Schedule 1 of the Taxation Administration Act 1953
       
    • The reasons for proposing to operate outside requirements of the Guidelines are detailed above.
     

    Table 2: Matters considered in seeking this variation to the Guidelines

    This section outlines where we are being consistent with the requirements of the Guidelines.

    Paragraph/Guideline

    Action taken/To be taken

    Paragraph 6

    Status of the Guidelines

    Our commitment to complying with the Guidelines is embedded in our data management policies and principles and clearly stated in the chief executive instruction.

    Guideline 1

    Application of the Guide

    We apply the guidelines for all data matching programs where it is anticipated the program will include records of 5,000 or more individuals.

    We recognise that programs where there are multiple data sources but with common objectives and algorithms are treated as a single data matching program.

    Guideline 2

    Deciding to carry out or participate in a data matching program

    We conduct a cost-benefit analysis and consider alternate methods prior to proposing to conduct a data matching program.

    Further, we have rigorous governance arrangements, processes and system controls in place to protect the privacy of individuals.

    Guideline 3

    Prepare a program protocol

    Prior to conducting a data matching program, we prepare a data matching program protocol, submit this to the Office of the Australian Information Commissioner and make a copy publicly available on the ATO website

    When elements of a data matching program change, the protocol is amended, a copy of the amended protocol is provided to the Office of the Australian Information Commissioner and updated on our website

    Guideline 4

    Prepare a technical standards report

    Documentation is prepared and maintained so as to satisfy the requirements of a technical standards report.

    Guideline 5

    Notify the public

    We publish notification of our intention to undertake a data matching program in the Federal Register of Legislation - Gazettes prior to the commencement of the program.

    This notice will include the following information as required by the Guidelines:

    • a brief description of the objectives of the data matching program
    • the matching agency and source entities involved in the data matching program
    • a description of the data contained in the data set involved in the data matching program
    • the categories of individuals about whom personal information is to be matched
    • the approximate number of individuals affected
    • reference to our privacy policy.

    Notification of the program is also published on our website and data providers are advised they can advertise their participation in the data matching program.

    Guideline 6

    Notify individuals of proposed administrative action

    Prior to taking any administrative action as a result of the data matching programs, individuals and other entities are given at least 28 days to verify the accuracy of the information provided to us by third parties.

    Guideline 7

    Destroy information that is no longer required

    We are seeking to vary from this requirement.

    Guideline 8

    Do not create new registers, datasets or databases

    We do not create new registers or databases using data obtained in the course of a data matching program.

    Guideline 9

    Regularly evaluate data matching programs

    Programs are evaluated within three years of the commencement of the data matching program. These evaluations are provided to the Office of the Australian Information Commissioner on request.

    Guideline 10

    Seeking exemptions from Guideline requirements

    When we intend to vary from the requirements of the Guidelines, we seek the approval of the Office of the Australian Information Commissioner and provide documentation to support the variance.

    Guideline 11

    Data matching with entities other than agencies

    We undertake our own data matching programs. This function is not outsourced.

    Where data is obtained from an entity other than an individual, we usually do so using our formal information gathering powers. In these instances the entities are advised they are able to notify their clients of their participation in the data matching program.

    Guideline 12

    Data matching with exempt agencies

    We do not usually undertake data matching with agencies that are exempt from the operations of the Privacy Act 1988 under section 7 of that Act and that are subject to the operation of the Guidelines (i.e. any data matching undertaken with an exempt agency would usually be for fewer than 5,000 individuals).

    In the event a data matching activity would otherwise be subject to these Guidelines except for the exemption status, we still adhere to the principles of the Guidelines and prepare a program protocol, seeking to vary from the Guidelines by not publicly notifying of the program and publishing the protocol. We would still lodge a copy of the protocol with the Office of the Australian Information Commissioner.

    Guideline 13

    Enable review by the Office of the Australian Information Commissioner

    We would not prevent the Office of the Australian Information Commissioner from reviewing our data matching activities and processes. These activities and processes have been reviewed by the Australian National Audit Office and Inspector-General of Taxation.

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    More information

    What we will do before we amend a return

    The property transfer data matching program is used to identify real property disposals during a financial year that potentially triggers a capital gains tax event. This may be used to:

    • prompt taxpayers through our prefilling service by identifying the property disposal that may have triggered a capital gains tax event
    • identify cases where taxpayers may have omitted to report income or capital gains from property disposals
    • identify taxpayers that may not be meeting other obligations under taxation or other laws administered by the ATO.

    Where administrative action is proposed, additional checks will take place to ensure the correct taxpayer has been identified. Where we detect a discrepancy that requires verification we will contact the taxpayer by telephone, letter or email.

    Before any administrative action is taken, taxpayers will be provided with the opportunity to verify the accuracy of the information obtained by us. Taxpayers will be given at least 28 days to respond before administrative action is taken.

    For example, where discrepancy matching identifies that a taxpayer may not be reporting all of their income, but in fact they are reporting the income under another entity, the taxpayer will be given the opportunity to clarify the situation.

    The data may also be used to ensure that taxpayers are complying with their other taxation and superannuation obligations, including registration requirements, lodgment obligations and payment responsibilities.

    In cases where taxpayers fail to comply with these obligations, even after being reminded of them, escalation for prosecution action may be instigated in appropriate circumstances.

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

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    Our on-disclosure provisions

    Division 355 of Schedule 1 to the Taxation Administration Act 1953 sets out the other government agencies we can disclose taxpayer information to, and the circumstances we are permitted to make those disclosures. These include agencies responsible for:

    • state and territory revenue laws
    • payments of social welfare and health and safety programs for determining eligibility for certain types of benefits and rebates
    • overseeing superannuation funds, corporations and financial market operators to ensure compliance with prudential regulations
    • determining entitlement to rehabilitation and compensation payments
    • law enforcement activities to assist with specific types of investigations.
    • policy analysis, costing and effectiveness measurement.

    Each request for information by other agencies will be assessed on its merits and must be for an admissible purpose allowed for by taxation laws. In specific permissible circumstances on-disclosures may include de-identified datasets for statistical analysis.

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    How we undertake data matching

    We use sophisticated identity matching techniques to ensure we identify the correct taxpayer when we obtain data from third parties. This technique uses multiple details to obtain an identity match. For example, where a name, address and date of birth are available all items are used in the identity matching process. Very high confidence matches will occur where all fields are matched.

    Additional manual processes may be undertaken where high confidence identity matches do not occur, or a decision taken to destroy the data with no further action. Our manual identity matching process involves an ATO officer reviewing and comparing third party data identity elements against ATO information on a one-on-one basis, seeking sufficient common indicators to allow confirmation (or not) of an individual's identity. We commonly call this process manual uplifting.

    Data analysts use various models and techniques to detect potential discrepancies, such as under-reported income or over-reported deductions. Higher risk discrepancy matches will be reviewed for compliance activity.

    Lower risk discrepancy matches will be further analysed and a decision made to take some form of compliance or educational activity, or to destroy the data.

    Destruction of data is conducted in accordance with the timeframes and requirements of the Guidelines and GDA24 or an extension of time is sought from the Information Commissioner.

    Where administrative action is proposed, additional checks will take place to ensure the correct taxpayer has been identified. The taxpayers will be provided with the opportunity to verify the accuracy of the information before any administrative action is taken.

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    How we protect your personal information

    Our staff are subject to the strict confidentiality and disclosure provisions contained in Division 355 of Schedule 1 to the Taxation Administration Act 1953 and include terms of imprisonment in cases of serious contravention of these provisions.

    All ATO computer systems are strictly controlled, 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 generally utilise our secure internet-based data transfer facility to obtain the data from source agencies.

    Where this is not possible, data providers will be requested to provide the data on a CD, DVD or USB media storage device encrypted to a standard that satisfies Australian government requirements. The media storage device will be password protected, with the password provided under separate cover.

    Where media storage device is not collected by an authorised ATO officer, an approved courier service will be used to collect the device. In remote locations not serviced by an approved courier service, the Australia Post ‘Express Post Platinum’ will be used (this provides both tracking and signature for delivery features).

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    Our quality assurance framework

    Quality assurance processes are integrated into our procedures and computer systems and are applied throughout the data matching cycle.

    These assurance processes include:

    • registering the intention to undertake a data matching program on an internal register
    • obtaining approval from the Data Steward and relevant Senior Executive Service (SES) officers prior to any activity being undertaken
    • conducting program pilots or obtaining sample data to ensure the data matching program will achieve its objectives prior to full data sets being obtained
    • notifying the Office of the Australian Information Commissioner of our intention to undertake the data matching program and request permission to vary from the data matching guidelines (where applicable)
    • access to the data is restricted to approved users and access management logs record details of who has accessed the data
    • quality assurance processes embedded into compliance activities include:
      • review of risk assessments, taxpayer profiles and case plans by senior officers prior to client contact
      • ongoing reviews of cases by subject matter technical experts at key points during the life cycle of a case
      • regular independent panel reviews of samples of case work to provide assurance of the accuracy and consistency of case work.
       

    These processes ensure data is collected and used in accordance with our data management policies and principles, and complies with the Information Commissioner's data matching guidelines.

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    Why we undertake data matching

    We have considered a range of alternatives to this data matching program to ensure entities are complying with their taxation and superannuation obligations. Relying only on data already held by the ATO is of limited value for the following reasons:

    • the taxation system operates on willing participation so our data is derived from taxpayers that are correctly registered and meeting their lodgment obligations
    • we have no other data to cross-reference to ensure taxpayers are reporting their obligations correctly other than by directly contacting every taxpayer.

    This data matching program will allow us to identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the taxation and superannuation systems. It will also reduce the likelihood of the ATO unnecessarily contacting taxpayers who are complying with their taxation obligations.

    Data matching is an effective method of examining records of thousands of taxpayers to ensure compliance with lodgment and reporting obligations that would otherwise be a resource intensive exercise.

    Data matching also assists us in effectively promoting voluntary compliance by notifying the public of areas and activities under scrutiny.

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    Costs and benefits of data matching

    Costs

    There are some incidental costs to us in the conduct of this data matching program, but these will be more than offset by the total revenue protected. These costs include:

    • data analyst resources to identify potential instances of non-compliance
    • compliance resources to manage casework and educational activities
    • governance resources to ensure that the Guidelines and Privacy Act 1988 are complied with, and quality assurance work to ensure the rigour of the work undertaken by analysts and compliance staff
    • storage of the data.

    Benefits

    Benefits from conducting this data matching programs include:

    • maintaining community confidence in both the taxation and superannuation systems by creating a level playing field, as well as maintaining community confidence in the ATO’s capacity to fairly administer those systems
    • integrity of the taxation and superannuation systems – there are inherent risks in taxpayers not complying with their obligations, including those that deliberately abuse these systems – this program will assist the ATO in detecting, dealing with and deterring those that are not meeting their obligations
    • enabling enforcement activity and recovery of taxation revenue – without undertaking this data matching program and subsequent compliance activity there are no assurances that a wider risk to revenue does not exist.

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    Making a privacy complaint

    If a taxpayer is not satisfied with how we have collected, held, used or disclosed their personal information, they can make a formal complaint by:

    • using the online complaints form at www.ato.gov.au/complaints
    • phoning our complaints line on 1800 199 010
    • phoning the National Relay Service on 13 36 77 (if you have a hearing, speech or communication impairment)
    • sending us a free fax on 1800 060 063
    • writing to us at:

    ATO Complaints

    PO Box 1271

    ALBURY NSW 2640.

    If a taxpayer is not satisfied with the outcome of the privacy complaint, they can contact the Office of the Australian Information Commissioner. More details on the process can be found on the OAIC website at www.oaic.gov.au/privacy/making-a-privacy-complaintExternal Link 

    For more information and to review our privacy policy visit our website at www.ato.gov.au/privacy

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    Our lawful role

    The Commissioner of Taxation has responsibility for ensuring taxpayers meet their taxation and superannuation obligations. Compliance with these obligations is a matter we take seriously and failure to address non-compliant behaviour has the potential to undermine community confidence in the integrity of the taxation and superannuation systems and our capacity to administer those systems.

    Our data matching program is one of the strategies used to identity and deal with non-compliant behaviour. Data matching programs also provide a degree of assurance that taxpayers are meeting their obligations.

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    Our legal authority to undertake a data matching program

    Legislation

    The data from the state and territory revenue authorities is negotiated, acquired and managed under the terms and references of Memoranda of Understanding between the relevant authorities and the ATO.

    Where appropriate, to ensure statutory requirements are met, the data will be obtained under 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 obligate the data providers to furnish the information requested. We will use the information for taxation 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 1988 and in particular:

    • 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.

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      Last modified: 02 Jan 2018QC 47402