Online sales data under the ATO microscope

If you make more than $12,000 per annum through online sales then you could be liable to pay tax.

The Australian Taxation Office’s (ATO) online selling data-matching program has been in place since 2008 and has recently opened the door to acquire data on sales via online selling platforms.

The data-matching program and the extension gives the ATO access to data on Australian sales made through online selling platforms for the 2018–19 through to the 2022–23 financial years.

Thousands of online sales on eBay Australia and New Zealand and Amazon Australia could now be held up for review through the data-matching program in order to identify taxpayers who may be failing to meet their tax obligations.

The ATO developed the program to ensure businesses and individuals selling goods and services online are correctly registered with the tax office, are lodging their returns, report the payments they receive and are of course, paying the correct amount of tax.

The program aims to promote voluntary compliance and increase community confidence in the integrity of the tax and superannuation systems.

It also provides the opportunity to identify and educate individuals and businesses who may be failing to meet their registration or lodgement obligations and assist them to comply.

They have targeted the details of online sellers who have sold goods or services with a total annual value of:

* $12,000 or more for the 2015–16 to 2017–18 financial years

* $10,000 or more for the 2014–15 financial year.

The ATO can obtain data from eBay Australia and New Zealand and Amazon Australia, which will assist them to detect potentially unreported income and identify taxpayers operating a business who have not met their registration, lodgement, reporting or payment obligations.

Data collected would include sellers’ identification details including their date of birth and contact information, as well as their online account details such as their IP address, their linked PayPal account and the value of their sales transactions.

It is expected that the ATO will be able to collect up to 30,000 account records for each financial year and they anticipate around half of the matched accounts to relate to online sellers acting as individuals.

Data records are expected to be kept for up to five years, allowing the ATO to cross-reference taxpayer records retrospectively.

The program will assist the ATO to gain insights from the data to help develop and implement engagement strategies to improve voluntary compliance, which may include educational or compliance activities.

If you’d like to get a better understanding of tax compliance around online sales as a business or individual, please reach out to the team of experts here at MWM.

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