How we use share transactions data
Sales and purchase data is obtained from ASIC and share registry service providers. This data is compared with information included in income tax returns and other information we hold to identify taxpayers that may not be meeting their:
- registration
- reporting
- lodgment, or
- payment obligations.
The program supports client engagement and voluntary compliance through initiatives such as education and pre-filling information in tax returns.
Previous related programs
This has been an active program since 2006 until legislation was amended, requiring share transaction reporting from ASIC (from 1 July 2016) and share registries, brokers, trustees and fund managers (from 1 July 2017).
Pre-fill and associated digital service messages were made available to approximately 240,000 taxpayers each year to prompt them to include the disposal of shares at the appropriate capital gains tax labels in their income tax returns.
Data was used for compliance activity, however due to the broad use of this data combined with other third-party data we hold, it is not possible to provide specific shares results.
Data providers
We are the matching agency and, in most cases the sole user of the data obtained during this data-matching program.
Data was obtained from ASIC and the following share registries:
- Link Market Services Limited
- Computershare Limited
- Australian Securities Exchange Limited
- Boardroom Pty Ltd
- Advanced Share Registry Services Pty Ltd
- Security Transfer Registrars Pty Ltd
- Automic Registry Services (Automic Pty Ltd).
Our formal information gathering powers
To ensure statutory requirements are met, we obtained data under our formal information gathering powers. These are contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.
This is a coercive power, and data providers were obligated to provide the information requested.
We use the data 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:
- 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.
Data elements we collected
We collected data from ASIC and share registries previously listed, for the period of 20 September 1985 to 30 June 2018.
The data quality is of a high standard as there is a requirement for government entities and share registries to account for and report on data relating to share transactions. We negotiated with the selected data providers individually to obtain data held within their systems. The collected data may contain all or a selection of the following fields:
- full name
- full address
- holder identity number
- shareholder registry number
- entity name
- entity ASX code
- purchase date and price
- sale date and price
- quantities of shares acquired or disposed of
- corporate actions affecting shareholders (e.g. corporate reconstructions)
- broker identity
- transaction codes
- entity type
- direction indicator (buy or sell).
ASIC provided the Australian Market Regulation feed for all products (apart from options and futures) quoted on the Australian Securities Exchange or Chi-X Australia markets to the ATO. We are acquiring this data under legislative reporting from 1 July 2016. This additional data collection goes back to the start of the market surveillance system in July 2014.
We obtained the following information from ASIC:
- Record type
- Record number
- Trade ID
- Transaction type, date and time
- Symbol
- Transaction unit price, volume and total value
- Market platform ID
- Indicators
- Buy broker
- Buy capacity
- Buy client origin of order number
- Buy account ID
- Buy secondary account ID
- Buy intermediary
- Sell broker
- Sell capacity
- Sell client origin of order number
- Sell account ID
- Sell secondary
- Account ID
- Sell intermediary
- Manual indicator.
Number of records
During this period, we collected data on approximately 7.47 million entities (individuals and non-individuals) across the program’s duration. The data was reported in line with the specifications outlined in the Share transactions data-matching protocol.
Data retention
We collected data under this program for the period of 20 September 1985 to 30 June 2018, bi-annually.
We were granted exemption by the OAIC to retain the data beyond the retention period, initially in 2006, with successive extensions granted, including a final 7-year extension in 2018. The exemption requests were required to satisfy the National Archives of Australia's General Disposal Authority 24 (GDA 24) – Records relating to data matching exercises.
GDA 24 has now been revoked and an exemption from the OAIC is no longer required to retain the data beyond the retention period. We conduct a regular internal assurance process to ensure that a business need remains and that only records required to be retained are kept in accordance with current data governance practices.
The data is required for the protection of public revenue:
- Retaining share transactions data supports our broader compliance approach to CGT.
- The data enhances our ability to identify taxpayers who may not be complying with their tax and superannuation obligations, which is integral to protecting the integrity of the tax and superannuation systems.
- When shares are sold (including instances where shares are transferred between individuals), this transaction may trigger a CGT event.
- Since shares can be held for many years before being sold, retaining historical data is crucial for accurately determining CGT obligations (calculating cost base and capital proceeds) at the time of the CGT event.
- The data is used in multiple risk models, including models that establish retrospective profiles over multiple years aligned with period of review.
While increased data retention periods may increase the risk to privacy, we have a range of safeguards to manage and minimise this. Our systems and controls are designed to ensure the privacy and security of the data we manage.
We destroy data that is no longer required in accordance with the Archives Act 1983, and the records authorities (issued by the National Archives of Australia), for both general and ATO-specific data.
Continue to: Notifying the public of the data-matching program
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