eBay sellers first target of ATO online sales data matching

Companies that made AU$10,000 and over in revenue online in FY15 will have to provide sales data to the Australian government to ensure they complied with tax laws.
Written by Corinne Reichert, Contributor

The Australian Taxation Office (ATO) will begin collecting data on sales made online over the past year and matching it with its own data, with eBay Australia and New Zealand a specific target.

The program will apply to online marketplaces that made AU$10,000 or more between July 1, 2014, and June 30, 2015. The companies must operate within Australia, track the activity of their sellers, and have the last year's trading activity logged.

"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," the announcement from the commissioner of taxation said.

The government said the sales data of between 15,000 and 25,000 individuals will be attained from companies, which will then be matched electronically with ATO data to reveal any discrepancies between the two data sets in regards to the obligations of registering, lodging, reporting, and paying taxes on sales.

The data-matching program aims to encourage voluntary taxation compliance; improve confidence in the system; identify companies that have failed to comply with their obligations; use the data to create and implement approaches to take in future; profile businesses that sell goods and services online; and ensure compliance and payment of tax.

The ATO will also look into educational strategies to improve compliance.

The Australian government has been signalling a crackdown on tax avoidance, on Wednesday afternoon unveiling its draft exposure legislation that will see GST added to all digital products and services purchased online by Australians.

The Tax Laws Amendment (GST Treatment of Cross-border Transactions) Bill 2015 [PDF] will apply the 10 percent GST to all intangible goods bought digitally by an Australian consumer from an overseas entity operating within the Australian tax zone, including streaming services, apps, games, music downloads, and ebooks, by mid-2017.

"When the GST was introduced in 2000, such transactions were relatively unusual, especially for consumers. However, cross-border supplies now form a large and growing part of Australian consumption," the explanatory material [PDF] to the draft legislation says.

"The growing importance of these types of transactions has highlighted the fact that the GST system was designed with a focus on Australian-based, rather than cross-border supplies ... This harms the integrity of the GST tax base and can disadvantage local suppliers."

The ATO will request companies that sell over AU$75,000 worth of goods and services to customers in Australia, or AU$150,000 for non-profit entities, to register their products for GST collection.

The government has also been working on preventing tax avoidance by multinational corporations doing business in Australia, after documents revealed that AU$31 billion made inside of Australia in one year had been funnelled through Singapore by 10 major companies.

Commissioner of Taxation Chris Jordan revealed on Wednesday that 80 companies are being targeted by the government to be "potentially affected" by the tax-avoidance crackdown.

"We know there are billions of dollars of sales that are booked overseas from activities that directly occur here in Australia," Jordan said on Wednesday.

During a Senate inquiry into tax dodging in April, tech giants Google, Apple, and Microsoft confessed to being audited by the ATO.

On Monday, the Organisation for Economic Cooperation and Development (OECD) announced the final recommendations from its two-year, G20-commissioned base erosion and profit-shifting (BEPS) project.

The OECD's recommendations aim to regain up to $240 billion lost globally in revenue every year thanks to tax avoidance -- around 10 percent of worldwide corporate income tax revenue, according to the organisation.

"The implementation of the OECD's work will limit the ability of multinational companies to exploit loopholes and the differences between jurisdiction's domestic laws that shifts profits to no or low-tax jurisdictions and therefore allows them not to pay tax in the jurisdiction where the economic activity that generates their profit actually occurs," Jordan said.

"The widespread and consistent implementation of these measures by countries around the world will be crucial to their success. With G20 backing there is every reason to believe that they can be successfully implemented and the ATO will continue to support the government in any way it needs to get this global implementation right."

Editorial standards