We collect data from a range of sources to protect honest businesses. Specific data-matching programs allow us to conduct formal data matching without it being legislated. We 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 we need to develop assistance products to help the community understand their tax obligations.
We are currently undertaking specific data-matching activities in the following areas:
Credit and debit cards
We 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 protocols.
We don’t gather information about individual credit or debit card holders.
Since 1 July 2017, these institutions need to automatically report this information to us each year.
Specialised payment systems
We obtain data on electronic payments made through specialised payment systems to Australian businesses. This data is analysed in conjunction with data collected through our credit and debit card data-matching program.
Online selling
We 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.
You can read our Online selling data-matching protocol.
Ride-sourcing
We obtain data from all ride-sourcing facilitators operating in Australia and their financial institutions to identify ride-sourcing drivers.
This information allows us to help drivers understand their tax obligations, including registration, lodgment, reporting and payment obligations.
You can read our Ride-sourcing data-matching program protocol. You can also find out more about the sharing economy.
Motor vehicle registries
We 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.
You can read our Motor vehicle registries data-matching protocol.
Cryptocurrency
We obtain data from Australian cryptocurrency designated service providers (DSPs) to ensure people trading in cryptocurrency are paying the right amount of tax.
You can read our Cryptocurrency data-matching protocol.
Examples of using data to protect honest businesses
The following examples show how our data-matching programs support compliance with tax obligations.
Example: under-reporting merchant sales
A clothing retailer with multiple retail stores appeared to be under-reporting merchant sales. We found an $870,000 discrepancy between their business activity statement and tax return.
The owner made a voluntary disclosure on reporting errors for 36 activity statements across the financial years 2010 to 2013, resulting in unpaid goods and services tax (GST) of $248,851. Since they were cooperative, no penalties were charged.
End of example
Example: cash-only business caught avoiding GST
One of the owners of a cash-only takeaway chicken shop had been previously audited twice for another chicken shop, involving cash wages and inadequate record keeping.
The owners were claiming a large portion of GST-free sales from the sale of cold, uncooked chickens. When we tried purchasing an uncooked chicken, we were told that it was unavailable as the shop is a takeaway.
Our audit revealed they had understated their sales by around $330,000 and were paying cash wages. The owners had to pay back $103,371 in GST as well as $77,528 in penalties.
End of example
Example: using benchmarks to determine unreported income
A cleaning services company appeared to be operating on a cash-only basis and was reporting outside benchmarks.
We discovered that not only was the director receiving more payment than his reported wage, but there were also no records of contractor payments, and significant AUSTRAC cash withdrawals existed, which we suspected were to pay employees and contractors. We also identified an undisclosed bank account.
The owner’s lack of record keeping and failure to provide all requested documents was enough for us to apply the industry benchmark. This resulted in $156,179 in unpaid GST and $283,602 pay-as-you-go withholding, as well as total penalties of $156,096.
End of example
Example: data matching reveals dishonest business
A business selling horse-riding equipment on an online selling platform with sales of $1,280,003 was selected for review.
We discovered the owner had registered the account in another person’s name and was selling unbranded horse saddles made by his parents' company in China.
We also found another online selling account and a website where no income was reported from either source. A specialised payment system account linked to this account and the website were linked to the owner’s personal bank account and showed significant AUSTRAC activity to Chinese bank accounts.
Our audit determined the entity had been under-reporting income and over-reporting expenses for the life of the business. They had been doing this by:
- never declaring income on export sales
- including unsubstantiated expenses in their tax return
- including non-business activity statement expenses in activity statement purchases.
The owner had to pay:
- $103,263 in GST
- $259,298 unpaid income tax
- $181,280 in penalties.