• Online selling data matching program protocol - 2014-15 financial year

    1 Data matching guidelines

    The Australian Taxation Office (ATO) is committed to voluntarily complying with the Guidelines on data matching in Australian government administration (2014) (guidelines) published by the Office of the Australian Information Commissioner (OAIC).

    The online selling data matching program protocol is prepared and published in accordance with these guidelines.

    2 Overview

    The online selling data matching program was developed to increase community confidence in the integrity of the tax system, promote voluntary compliance, help protect businesses from unfair competition and assess the level of taxation compliance of individuals and businesses involved in selling goods and services via online selling sites. Online selling data has been collected since 2007-08.

    Details of registrants who sold goods and services with a total value of $10,000 or more in the 2014-15 financial year will be requested from Australian online selling sites.

    The ATO will match the data provided by online selling sites against ATO records to identify businesses that may not be meeting their registration, reporting, lodgment and/or payment obligations.

    3 Purpose & objectives

    Purpose

    The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation obligations in relation to their sales through online selling sites. These obligations include registration, lodgment, reporting and payment responsibilities.

    Objectives

    Objectives of the online selling data matching program:

    • Promote voluntary compliance and increase community confidence in the integrity of the tax system
    • Identify those apparently operating a business but failing to meet their registration and/or lodgment obligations
    • Gain insights from the data that may help to develop and implement treatment strategies to improve voluntary compliance; which may include educational or compliance activities as appropriate
    • Obtain intelligence to increase the ATO’s understanding of the behaviours and compliance profiles of individuals and businesses that sell goods or services via online selling sites.
    • Ensure compliance with registration, lodgment, correct reporting and payment of taxation obligations.

    The ATO is seeking to obtain external data to cross-reference with its own data to identify relevant cases for administrative action, including compliance and educational strategies.

    4 Agencies & entities involved

    Matching & Primary User Agency

    The ATO is the matching agency and will generally be the sole user of the data. The data matching program will be conducted using the ATO’s secure computer systems and in accordance with approved policies and procedures.

    In very limited and specific circumstances as contained in Division 355 of Schedule 1 to the Taxation Administration Act 1953, the ATO may provide individual records to other agencies, including state and territory revenue authorities and law enforcement agencies. These other agencies include those responsible for:

    • Administering social welfare, health and safety programs for the purposes of determining eligibility to certain types and benefits and rebates
    • Determining entitlement to rehabilitation and compensation payments.

    Each request for information by these other government agencies will be assessed on its merits and must be for an admissible purpose allowed for by taxation laws.

    Source Entities

    A principle based approach has been adopted to ensure that inclusion as a source entity is consistent and transparent.

    Inclusion as a data provider for this program is based on the following principles:

    • The data owner or its subsidiary operates a business in Australia that is governed by Australian law
    • The data owner provides an online market place for businesses and individuals to buy and sell goods and services
    • The data owner tracks the activity of registered sellers
    • The data owner has clients whose annual trading activity amounts to $10,000 or more
    • The data owner has trading activity for the year in focus
    • Where the client base of a data owner does not present an omitted or unreported income risk, or the administrative or financial cost of collecting the data exceeds the benefit the data may provide, the data owner may be excluded from the program.

    Following a review of all online selling sites in Australia and in consideration of the criteria above data will be obtained from eBay Australia and New Zealand Pty Ltd.

    The ATO will continue to monitor the online selling market to determine which entities meet the collection criteria and may collect data from new source entities as appropriate. This may involve seeking sample data to test the risk profile of an entity’s client base.

    In accordance with Guideline 5.9 the ATO has also advised that the source entity to take reasonable steps to notify the general public of their participation in this data matching program. To assist with this, the ATO will:

    • Provide written materials the data provider can provide to its clients advising of their participation in this program
    • Advise the data providers to update their privacy policies to note that personal information is disclosed to the ATO for data matching purposes.

    5 Data issues

    Data elements

    The ATO will obtain the following data items from the source agencies for the 2014-15 financial year:

    • Account name
    • Account identification
    • Name and date of birth of account holder
    • Business name
    • Address
    • Telephone numbers
    • Email address
    • Account registration date
    • Number and value of annual sales transactions
    • Number and value of monthly sales transactions
    • Internet Protocol (IP) address
    • Seller status – tier type
    • Business / Store status indicator – yes/no

    Number of records

    It is estimated that the total number of account records that will be obtained is between 30,000 and 40,000. The number of affected individuals linked to those accounts is expected to be between 15,000 and 25,000.

    Data quality

    The ATO expects the data acquired will be of high quality as it has been in previous collections. The data owner holds sufficient information about their members’ transactions to determine the fees for services provided, receive and make payments and communicate with the sellers.

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

    Data integrity

    The ATO uses 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 name, address and date of birth are available all items are used in the identity matching process. 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.

    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 detrimental administrative action is taken.

    Data security

    ATO staff are subject to the strict secrecy and privacy 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.

    The ATO will, where possible, use its secure internet-based Data Transfer Facility to obtain the data from source agencies.

    6 Discrepancy matching

    Matching process

    The identity matching process is described above under ‘Data integrity’ and is the first step in the matching process.

    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 loaded to the ATO’s case management system and allocated to compliance staff for actioning.

    Lower confidence and unmatched data will be further analysed over the life of the program to attempt to increase the level of confidence in the match rating and identify further cases that may require compliance or educational activity.

    Quality assurance

    Quality assurance processes are integrated into ATO processes 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 ATO internal central register
    • Obtaining approval from the Data Matching Gatekeeper 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 OAIC of our intention to undertake the data matching program and request permission to vary from the Data Matching Guidelines
    • Maintaining access management logs recording details of who has access to the data, why access is required and how it will be used
    • Processes embedded into compliance activities, such as:
      • Review of risk assessments, taxpayer profiles and case plans by senior officers prior to client contact
      • On-going 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 the ATO’s data management policies and principles, and complies with OAIC’s data matching guidelines.

    7 Previous program

    This ATO data matching program has been on-going since the 2007-08 financial year. Generally over 70% of accounts received are matched with high confidence and compliance activity undertaken as a result of these matches has resulted in improved compliance and increased tax revenue.

    Over 8,000 individuals and businesses have been contacted in prior programs for either compliance or educational activity. Total tax and penalties of over $4.5 million has been raised.

    The on-going collection of online selling data enables the ATO to review and educate online sellers who are transitioning from hobby status to potentially being ‘in business’.

    8 Action resulting from the program

    This program will be used to identify individuals and businesses that may be omitting income or not complying with their lodgment obligations as part of the intent to protect businesses from unfair competition.

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

    For example, where discrepancy matching identifies that a taxpayer is not 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 obligations, including registration requirements, lodgment obligations and payment responsibilities.

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

    Where a taxpayer has correctly met its obligations, the use of the data will reduce the likelihood of contact from the ATO.

    9 Time limits applying to the program

    The collection of data under this program protocol is expected to occur in the period September to October 2015.

    The ATO is seeking to have the Privacy Commissioner exercise his discretion and allow the ATO to vary from the data destruction requirements contained in the guidelines.

    The ATO is seeking to retain the data for five years from the collection of data on the basis that its retention is required for the protection of public revenue. Current guidelines allow for a twelve month retention. Destroying the data in the timeframes contained in the guidelines would hinder the ATO’s ability to protect public revenue because:

    • Individuals identified as not meeting their taxation obligations, including being partly or wholly outside the taxation system, may have been operating that way for multiple years. A retention period of five years will enable the ATO to cross reference taxpayer records retrospectively
    • The nature of the discrepancy matching that occurs under this program will be, in some instance, iterative. This includes the data being used to generate lodgment reviews with subsequent lodgments then being compared to the transactional data for accuracy. This process can occur over multiple years
    • It would hinder our ability to conduct long term trend analysis and risk profiling of the online selling market, including identifying traders who are transitioning from a hobby to a business.

    The retention period sought aligns with the requirement for taxpayers to keep their business records for five years.

    A full case setting out the basis for seeking this variation to the guidelines and its impacts on individual privacy is contained at Appendix A.

    10 Public notice of the program

    The ATO will publish a public notification of this data matching program in the Commonwealth Government Notices Gazette in the week commencing 28 September 2015. A copy of the gazette notice will be provided to the data providers and the OAIC. A copy of the proposed gazette notice is included at Appendix B.

    The ATO will publish a copy of this data matching program protocol on its website once the gazette notice has been published. It can be accessed from www.ato.gov.au/dmprotocols

    Data providers have been advised they may also notify their clients of participation in this data matching program.

    The ATO often uses social and proactive media to notify the public of its data matching programs. This includes Facebook posts, tweets and media releases. It is expected that some or all of these channels will be used to alert the public of this data matching program.

    11 Privacy complaints

    If a taxpayer is not satisfied with how the ATO has collected, held, used or disclosed its personal information, they can make a formal complaint.

    A complaint can be lodged 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, or
    • writing to:

    ATO Complaints
    PO Box 1271
    ALBURY NSW 2640

    12 Relationship to lawful functions

    The Commissioner of Taxation has responsibility for ensuring taxpayers meet their taxation obligations. Compliance with these obligations is a matter the ATO takes seriously and failure to address non-compliant behaviour has the potential to undermine community confidence in the integrity of the taxation system and the ATO’s capacity to administer the system.

    The ATO’s 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.

    13 Legal authority

    ATO Legislation

    The data will be obtained under the ATO’s 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 data providers to furnish the information requested. The ATO will use the information for taxation 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; and
    • APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for the ATO’s enforcement related activities.

    14 Alternative methods

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

    • The ATO only receives data from taxpayers that are correctly registered and meeting their lodgment obligations
    • The ATO has no other data to cross-reference to ensure taxpayers are reporting their obligations correctly other than by directly contacting every taxpayer
    • There are no current internal data sets that contain the online selling information sought under this program.

    This data matching program will allow the ATO to identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the taxation system. It will also reduce the likelihood of the ATO unnecessarily contacting taxpayers who appear to be 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. It also assists the ATO in effectively promoting voluntary compliance by notifying the public of areas and activities under scrutiny.

    15 Costs & benefits

    Costs

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

    • 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 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 the taxation system by creating a level playing field, as well as maintaining community confidence in the ATO’s capacity to fairly administer the system
    • Integrity of the taxation system – there are inherent risks in taxpayers not complying with their obligations, including those that deliberately abuse these system – 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.
    • The ATO having a greater understanding of the businesses operating in the cash economy and being able to cater for these businesses in our compliance and educational strategies.
    • Assisting the ATO to promote voluntary compliance by notifying the public of areas and activities under scrutiny.

    Appendix A

    Variation to Guidelines

    The Australian Taxation Office (ATO) is seeking approval for the online selling data matching program to vary from one or more of the conditions detailed in Guideline 10 of the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014) (the guidelines).

    The ATO is seeking to retain data for five years from receipt of all verified data files from data providers. The ATO considers that a variation from the usual retention periods for this data matching program is in the public interest as:

    • A retention period of five years will enable the ATO to cross reference taxpayer records retrospectively.
    • The nature of the discrepancy matching that occurs under this program will be, in some instances, iterative, occurring over multiple years.
    • It would enable the ATO to conduct long term trend analysis and risk profiling of the online selling market.
    • Destruction of the data would inhibit the ATO’s ability to identify taxpayers who may be subject to administrative action and therefore result in loss of public revenue.

    The ATO has determined that this variation will not affect the privacy of an individual.

    The retention period sought aligns with the requirement for taxpayers to keep their business records for five years.

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

    • Table 1 – Matters considered in accordance with Guideline 10.2 in seeking this variation
    • Table 2 – Consistency with requirements of the other Guidelines issued by the Office of the Australian Information Commissioner

    The ATO does not require that this request be kept confidential (Guideline 10.6) and has no concern should the Office of the Australian Information Commissioner place this information on its website.

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

    Matter considered

    Consideration

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

    • Retaining data for a period of five years will not increase the risks to an individual’s privacy. The ATO has in place very secure processes for handling and storing data. Once acquired, all data will be stored on ATO secure computer systems where access is strictly controlled and full audit logs maintained.
    • The ATO and its staff operate under stringent secrecy 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.

    10.2.2 - 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 the ATO proposes to take administrative action where a taxpayer may have reported incorrectly, the ATO will 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 will be followed to ensure fairness and consistency.

    10.2.3 - 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 the courts and tribunals.

    10.2.4 - 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 the ATO will strictly adhere to the commitments in that document
    • The ATO will publish a notice with general information about the program in the Commonwealth government notices gazette before data matching commences. The ATO will also make a copy of the program protocol available on its website.

    10.2.5 - 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 is solely for the stated objectives established in the data matching program protocol.

    10.2.6 - 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 the ability of the ATO to detect incorrect reporting and taxation fraud without understanding and monitoring 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 the ATO’s ability to identify taxpayers who may be subject to administrative action
      • Resulting in the loss of revenue

    10.2.7 - 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.

    10.2.8 - 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 the ATO 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 proposed compliance activity. The ATO would miss the opportunity to educate those taxpayers trying to do the right thing, and deterring those that are non-compliant from repeating the behaviour.
    • The effect of abiding by all of the requirements in the Guidelines could negatively impact on both public revenue and public and government confidence in the ATO. 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 the on-going role of the ATO.

    10.2.9 - 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

    • Only information relating to the taxpayer’s own affairs will be released upon receipt of a Freedom of Information request.

    10.2.10 - The legal authority for conducting the proposed program in a way inconsistent with the specified requirements of the guidelines

    • There is no specific legislative power authorising the conduct of this program in a way inconsistent with the guidelines
    • The Commissioner of Taxation, or his authorised representative, has formed the opinion that this data is required to enable the ATO 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
    • 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 the ATO is consistent with the requirements of the Office of the Australian Information Commissioner’s guidelines on data matching in Australian government administration (2014).

    Paragraph/Guideline

    Action taken/To be taken

    Paragraph 6 - Status of the guidelines

    The ATO has committed to complying with the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian government administration (2014) by way of a Chief Executive instruction.

    Guideline 1 - Application of the guide

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

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

    Guideline 2 - Considerations before conducting a data matching program

    The ATO conducts a cost-benefit analysis and considers alternate methods prior to proposing to conduct a data matching program.

    Further, the ATO has 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, the ATO prepares a data matching program protocol, submits this to the Office of the Australian Information Commissioner and makes a copy publicly available on the ATO website

    When elements of a data matching program change, the protocol is amended and a copy of the amended protocol provided to the OAIC and update the ATO website

    Guideline 4 - Technical standards report

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

    Guideline 5 - Notify the public

    The ATO publishes notification of its intention to undertake data matching program in the Commonwealth government gazette notices 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 the ATO’s privacy policy

    Notification of the program is also published on the ATO’s 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 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 the ATO by third parties.

    Guideline 7 - Destroy information that is no longer required

    The ATO is seeking to vary from this requirement.

    Guideline 8 - Do not create new registers, datasets or databases

    The ATO does not create new registers or databases using data obtained in the course of a data matching program.

    Guideline 9 - Data matching program evaluations

    Programs are regularly evaluated within 3 years of the commencement of the data matching program. These evaluations are provided to the Office of the Australian Information Commissioner.

    Guideline 10 - Variations to guideline requirements

    When the ATO intends to vary from the requirements of the guidelines it seeks the approval of the Office of the Australian Information Commissioner and provides documentation to support the variance.

    Guideline 11 - Data matching with entities other than agencies

    The ATO undertakes its own data matching programs.

    The ATO does not outsource this function.

    Where data is obtained from an entity other than an individual, the ATO usually does so using its 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

    The ATO does 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, the ATO would still adhere to the principles of the guidelines and prepare a program protocol, seeking to vary from the Guidelines by not publishing a public notice or the protocol document. The ATO 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

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

    Appendix B

    Gazette Notice

    Commissioner of Taxation

    NOTICE OF A DATA MATCHING PROGRAM

    The Australian Taxation Office (ATO) will acquire online selling data relating to registrants who sold goods and services to a value of $10,000 or more during the period 1 July 2014 to 30 June 2015.

    Data providers are included in/excluded from the program based on the following principles:

    • The data owner or its subsidiary operates a business in Australia that is governed by Australian law
    • The data owner provides an online market place for businesses and individuals to buy and sell goods and services
    • The data owner tracks the activity of registered sellers
    • The data owner has clients whose annual trading activity amounts to $10,000 or more
    • The data owner has trading activity for the year in focus
    • Where the client base of a data owner does not present an omitted or unreported income risk, or the administrative or financial cost of collecting the data exceeds the benefit the data may provide, the data owner may be excluded from the program.

    In accordance with the principles listed above data will be sought from eBay Australia and New Zealand Pty Ltd, a subsidiary of eBay International AG which owns and operates www.ebay.com.au

    The data requested will include information that enables the ATO match online selling accounts to a taxpayer, including name, address and contact information as well as information on the number and value of transactions processed for each online selling account. This acquired data will be electronically matched with certain sections of ATO data holdings to identify possible non-compliance with taxation law.

    It is estimated that records relating to between 15,000 and 25,000 individuals will be matched.

    These records will be electronically matched with certain sections of ATO data holdings to identify non-compliance with registration, lodgment, reporting and payment obligations under taxation laws.

    The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation obligations in relation to business sales through online selling sites. These obligations include registration, lodgment, reporting and payment responsibilities. Its objectives are to:

    • Promote voluntary compliance and increase community confidence in the integrity of the tax system
    • Identify those apparently operating a business but failing to meet their registration and/or lodgment obligations
    • Gain insights from the data that may help to develop and implement treatment strategies to improve voluntary compliance; which may include educational or compliance activities as appropriate
    • Obtain intelligence to increase the ATO’s understanding of the behaviours and compliance profiles of individuals and businesses that sell goods or services via online selling sites.
    • Ensure compliance with registration, lodgment, correct reporting and payment of taxation 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

      Last modified: 06 Oct 2015QC 46997