Tax Office continues to data match online sellers, but ramps up the target

Tuesday, Apr 28, 2015

Both the Tax Office and the Department of Human Services (which governs Centrelink) have in the past asked for data from eBay, and they are set to make another request soon.

eBay is legally required to comply with a formal request for information. For a recent financial year for example, eBay was asked to reveal the identities of about 15,000 people who sold more than $20,000 worth of goods on the trading site.

However this year’s target threshold, as just announced by the Tax Office, is now $10,000 — so obviously a lot more buyers and sellers will be tapped on the shoulder. In fact, the stated aim of the Tax Office is to look at the online selling data of between 15,000 and 25,000 individuals.

Matching this data to its own records, the Tax Office will use this information to identify omitted income as well as registration, reporting and lodgement obligations.

Many taxpayers will have noticed that “pre-filling” has become much more widespread, which is only possible due to the amount of financial information that is able to be accessed by the Tax Office.

Each year the government’s revenue collection arm extends further and further into the databases of financial institutions, employers and to other sources of relevant records, and with millions of dollars in play, the taxman’s ability to pre-fill and use tools such as data-matching and performance benchmarks looks likely to increase.

With the amount of data kept online about taxpayers, it pays to be ever vigilant about meeting tax obligations and therefore avoiding otherwise unnecessary penalties.

This is especially so given the Tax Office’s recent update to the protocols governing its Online Selling Data Matching Program. Now in its fourth year, the program was developed to assess the overall level of tax compliance for anyone involved in selling goods or services via online selling sites, such as eBay.

These entities (called “data owners” in the Tax Office’s announcement) are included in the Tax Office’s data matching 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.