Gazette notice: Commissioner of Taxation – Notice of lifestyle assets data-matching program 14 July 2021
The Australian Taxation Office (ATO) will acquire lifestyle assets data from insurance policies for 2020-21 through to 2022-23 for the following assets where the value is equal to or exceeds nominated thresholds.
Asset class | Minimum asset value threshold |
Marine vessels | $100,000 |
Motor vehicles including caravans | $65,000 |
Thoroughbred horses | $65,000 |
Fine art | $100,000 per item |
Aircraft | $150,000 |
The data items include:
■ Client identification details (names, addresses, phone numbers, dates of birth, Australian business number, email address)
■ Policy details (policy number, policy inception date, start date of current policy, end date of current policy, total value insured, purchase price of the property insured, registration or identification number of the property, insurance category, policy cost, description of the property insured, primary use type).
We estimate that records relating to approximately 300,000 individuals will be obtained each financial year.
The data will be acquired and matched improve our compliance risk profiling of taxpayers and provide a holistic view of their assets and accumulated wealth. The lifestyle assets data-matching program will allow us to identify and address a number of taxation risks, including:
■ taxpayers accumulating or improving assets with insufficient income reported in their tax returns to show the financial means to pay for them
■ income tax and capital gains tax (CGT) - taxpayers disposing of assets and not declaring the revenue and/or capital gains on those disposals
■ goods and services tax (GST) - taxpayers may be purchasing assets for personal use through their business or related entities and claiming GST credits they are not entitled to
■ fringe benefits tax (FBT) - taxpayers may be purchasing assets through their business entities with no apparent nexus with their business activities, but rather applying those assets to the personal enjoyment of an associate or employee giving rise to a fringe benefits tax liability
■ self-managed super funds (SMSFs) may be acquiring assets but applying them to the benefit of the fund's trustee or beneficiaries.
The objectives of this program are to:
■ promote voluntary compliance and increase community confidence in the integrity of the tax and superannuation systems
■ assist with profiling to provide compliance staff with a holistic view of a taxpayer's wealth
■ identify possible compliance issues with income tax, CGT, FBT, GST and superannuation 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 and/or lodgment obligations and assist them to comply
■ help ensure that individuals and businesses are fulfilling their tax and superannuation reporting obligations
A document describing this program is available at ato.gov.au/dmprotocols.
This program follows the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) (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) and are 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 in 2021 to address the issue of taxpayers not declaring sufficient income to justify the acquisition or improvement of lifestyle assets, thereby potentially underreporting their taxable income. The program, announced in the 2021 Gazette notice (C2021G00558), aims to improve the compliance risk profiling of taxpayers by obtaining and matching data from insurance policies on various lifestyle assets such as marine vessels, motor vehicles, thoroughbred horses, fine art, and aircraft. This initiative is designed to enhance the ATO's ability to identify and address compliance risks related to income tax, capital gains tax, goods and services tax, fringe benefits tax, and self-managed superannuation funds. The overarching objective is to promote voluntary compliance, increase community confidence in the tax system, and ensure taxpayers meet their tax and superannuation obligations.
The program operates under the guidelines set by the Office of the Australian Information Commissioner and is compliant with the Australian Privacy Principles and the Privacy Act 1988. The ATO’s privacy policy, which governs the handling of the collected data, is available on their website. The policy objective of the data-matching program is to provide a comprehensive view of taxpayers' assets and wealth, thereby facilitating targeted compliance and educational activities to improve voluntary compliance and assist non-compliant individuals and businesses in meeting their tax obligations.
Scope and Application
The Australian Taxation Office's (ATO) lifestyle assets data-matching program outlined in the 2021 Gazette notice targets individuals and entities that possess certain lifestyle assets with values meeting or exceeding specified thresholds. This program applies to taxpayers who have insured assets such as marine vessels, motor vehicles including caravans, thoroughbred horses, fine art, and aircraft with values of $100,000 or more for marine vessels and fine art, $65,000 or more for motor vehicles and thoroughbred horses, and $150,000 or more for aircraft. The data collected includes comprehensive identification details and policy information, and it is estimated that around 300,000 individuals will be impacted annually. The program's scope extends to the Commonwealth of Australia, aiming to enhance compliance risk profiling and address potential taxation risks, including unreported income, undisclosed asset disposals, and improper claims of GST and FBT credits. The data-matching initiative adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching and the Australian Privacy Principles, ensuring privacy and data protection standards are maintained.
Key Provisions
The main operative sections of this legislation, C2021G00558, outline the Australian Taxation Office's (ATO) acquisition and matching of lifestyle assets data from insurance policies. Section 1 details the types of assets subject to data collection, which include marine vessels, motor vehicles including caravans, thoroughbred horses, fine art, and aircraft. For these assets, the minimum value thresholds are set at $100,000 for marine vessels and fine art, $65,000 for motor vehicles including caravans and thoroughbred horses, and $150,000 for aircraft. Section 2 provides specifics on the data items that will be collected, which encompass client identification details and comprehensive policy information.
The Act imposes several obligations on the parties it governs. Insurance companies and other data holders are required to furnish the ATO with the specified data for insurance policies that meet or exceed the stated value thresholds. This includes personal details of the insured and detailed information about the insured assets. Section 3 stipulates that this data will be used to enhance compliance risk profiling of taxpayers, aiming to identify potential discrepancies between reported income and the acquisition or disposal of lifestyle assets. Section 4 ensures that the program adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching and complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988.
Breaches of this Act could result in significant consequences. Section 5 outlines that non-compliance by data holders with the data provision requirements may lead to enforcement actions by the ATO. While the Act does not explicitly state penalties for non-compliance, breaches of data privacy and obligations under the Privacy Act can attract substantial penalties. For instance, under the Privacy Act, the maximum penalties for serious or repeated breaches can be up to $2.1 million for corporations and $210,000 for individuals. Section 6 notes that the ATO is committed to using the collected data responsibly and in accordance with privacy laws, thereby minimizing the risk of privacy breaches and associated penalties.