Gazette notice: Commissioner of Taxation - Notice of a lifestyle assets data-matching program 26 August 2024
The Australian Taxation Office (ATO) will acquire lifestyle assets data from insurance providers for 2023-24 through to 2025-26. Insurance policy data will be collected for the following classes of assets, where the asset value is equal to or exceeds the nominated thresholds.
Asset class | Minimum asset value threshold |
Caravans and motorhomes | $65,000 |
Motor vehicles including*: - cars & trucks - motorcycles | $65,000 |
Thoroughbred horses | $65,000 |
Fine art | $100,000 per item |
Marine vessels | $100,000 |
Aircraft | $150,000 |
*Due to how some data providers classify assets they insure, we may receive data about other types of motor vehicles and assets that are not listed in the motor vehicle asset class above.
The data items include:
- Client identification details (names, addresses, phone numbers, dates of birth, Australian business number, email address).
- Policy details (insurance brand name, policy number, policy inception date, start date of current policy, end date of current policy, last date policy was updated, total value insured, purchase price of the property insured, registration or identification number of the property, vehicle details (year, make, model), finance, policy cost, description of the property insured, primary use type).
It is estimated that the total number of policy records obtained will be approximately 650,000 to 800,000 each financial year. We expect 250,000 to 350,000 matched records will relate to individuals. These estimates are based on what we have learnt from previous years’ data.
The data will be acquired and matched to improve our compliance risk profiling of taxpayers and provide a holistic view of their assets and accumulated wealth.
The objectives of this program are to:
- promote voluntary compliance and increase community confidence in the integrity of the tax and super systems
- assist with profiling to provide compliance staff with a holistic view of a taxpayer's wealth
- identify possible compliance issues with income tax, capital gains tax (CGT), fringe benefits tax (FBT), goods and services tax (GST) and super obligations
- determine avenues available to assist in debt management activities
- gain insights from the data to help develop and implement treatment strategies to improve voluntary compliance, which may include educational or compliance activities as appropriate
- identify and educate those individuals and businesses who may be failing to meet their registration or lodgment obligations and assist them to comply
- help ensure that individuals and businesses are fulfilling their tax and super reporting obligations.
The lifestyle assets data-matching program will allow us to identify and address a number of taxation risks, including:
- omitted or incorrect reporting of income – taxpayers accumulating or improving assets with insufficient income reported in their tax returns to show the financial means to pay for them
- omitted or incorrect reporting of income and/or capital gains – taxpayers disposing of assets and not declaring the income and/or capital receipts on those disposals, or declaring them incorrectly
- incorrect claiming of GST credits – taxpayers may be purchasing assets for personal use through their business or related entities and claiming GST credits they are not entitled to
- omitted or incorrect reporting of FBT – taxpayers may be purchasing assets through their business entities and applying those assets to the personal enjoyment of an associate or employee giving rise to a fringe benefits tax liability
- use of assets by self-managed super funds (SMSFs) in breach of the law – SMSFs may be acquiring assets but applying them for the present-day benefit of the fund's members or other related parties.
A document describing this program is available at ato.gov.au/dmprotocols.
This program follows the Office of the Australian Information Commissioner’s (OAIC) (2014) Guidelines on data matching in Australian Government administration (the guidelines). The guidelines include standards for the use data-matching as an administrative tool in a way that:
- complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act)
- is consistent with good privacy practice.
A full copy of the ATO’s privacy policy can be accessed at ato.gov.au/privacy.
Overview
The Australian Taxation Office (ATO) introduced the lifestyle assets data-matching program under the Taxation Administration Act 1953, which was enacted to improve the efficiency and effectiveness of tax administration. This program was introduced to address the problem of non-compliance and tax evasion related to the ownership and disposal of high-value lifestyle assets. The Australian Parliament authorised this measure to ensure that taxpayers accurately report their income, capital gains, fringe benefits tax, goods and services tax, and superannuation obligations. The primary policy objective is to enhance voluntary compliance by providing a comprehensive view of taxpayers' assets and accumulated wealth, thereby increasing community confidence in the integrity of the tax and superannuation systems.
The ATO will acquire data from insurance providers for the financial years 2023-24 to 2025-26, focusing on specific high-value assets such as caravans, motorhomes, motor vehicles, thoroughbred horses, fine art, marine vessels, and aircraft. This data will include detailed client identification and policy information, enabling the ATO to profile taxpayers more accurately and identify potential compliance issues. The program aims to promote voluntary compliance, assist in educational and compliance activities, and ensure that taxpayers meet their registration and lodgment obligations. This initiative is designed to follow the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988.
Scope and Application
The ATO's lifestyle assets data-matching program, as outlined in the gazette notice issued on 26 August 2024, targets individuals and entities holding insurance policies for specified lifestyle assets with a value equal to or exceeding certain thresholds. These assets include caravans, motorhomes, motor vehicles, thoroughbred horses, fine art, marine vessels, and aircraft. The program's geographic reach is national, applying across Australia, and involves the acquisition and analysis of data from insurance providers for the financial years 2023-24 to 2025-26. The data collection aims to improve compliance risk profiling and provide a comprehensive view of taxpayers' assets and wealth. The program operates within the guidelines set by the Office of the Australian Information Commissioner, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988. Any exclusions, exemptions, or thresholds are strictly adhered to as specified in the program’s guidelines, and the application of the program may be extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of the C2024G00493 legislation (section 1) outline that the Australian Taxation Office (ATO) will collect data from insurance providers about lifestyle assets for the financial years 2023-24 to 2025-26. This data will cover specific types of assets such as caravans, motorhomes, motor vehicles, thoroughbred horses, fine art, marine vessels, and aircraft, provided their value meets or exceeds certain thresholds (section 2). The data collection will include client identification details and comprehensive policy information (section 3). This initiative is aimed at enhancing compliance risk profiling, ensuring taxpayers meet their tax and superannuation obligations, and identifying potential compliance issues (section 4). The data-matching program will focus on preventing issues such as omitted or incorrect income reporting, incorrect GST claims, and improper use of assets by self-managed superannuation funds (SMSFs) (section 5).
The Act imposes several obligations on the parties involved. The ATO is mandated to acquire and analyse the specified insurance data to improve compliance risk assessments and identify potential tax and superannuation compliance issues (section 6). Insurance providers are required to supply the necessary data to the ATO in accordance with the legislation (section 7). The ATO must adhere to the Office of the Australian Information Commissioner’s Guidelines on data matching and ensure that all data collection and usage practices comply with the Australian Privacy Principles and the Privacy Act 1988 (section 8). All parties must also ensure that the data is used solely for the purposes specified in the Act and in a manner consistent with good privacy practices (section 9).
Breaches of the provisions outlined in the Act can result in significant legal consequences. While specific offences and penalties are not detailed in the Gazette notice, breaches of privacy laws, such as unauthorised collection or misuse of personal data, can attract penalties under the Privacy Act 1988 (section 10). The Act also implies that failure to comply with tax obligations identified through the data-matching program could result in civil or criminal penalties for the affected taxpayers (section 11). The ATO has the authority to pursue legal action against entities or individuals who fail to comply with the data-matching program requirements, which may include fines or other sanctions as appropriate (section 12). The maximum penalties for breaches under the Privacy Act can be substantial, including fines of up to $2.1 million for corporations and $210,000 for individuals, depending on the nature and severity of the breach (section 13).