Notice of Data Matching Program - Contractor Payments

Overview

The Australian Taxation Office (ATO) Data Matching Program, introduced in 2015, continues to target entities that receive contractor payments from other businesses, aiming to ensure compliance with taxation laws. This program, which collects data for the 2013-14, 2014-15, and 2015-16 financial years, is an extension of ongoing efforts by the employer obligations area within the ATO. It involves gathering details such as the Australian Business Numbers (ABNs) of both the payer and payee, contractor names and addresses, and payment specifics including GST. The data will be matched with ATO records to identify non-compliance with registration, lodgment, reporting, and payment obligations. The primary objective is to verify and improve taxpayer compliance, enhance the integrity of the Australian Business Register, and promote voluntary compliance, thereby strengthening community confidence in the tax system. This initiative adheres to privacy standards outlined by the Office of the Australian Information Commissioner.

Scope and Application

The Commissioner of Taxation, through the Australian Taxation Office (ATO), has announced the continuation of a data matching program aimed at entities receiving contractor payments from businesses for the financial years 2013-14, 2014-15, and 2015-16. This program applies to businesses that are subject to compliance activities conducted by the employer obligations area within the ATO, and data may also be collected from other businesses associated with the primary businesses. The information to be obtained includes the Australian Business Number (ABN) of both the payer and payee businesses, the name, address, and telephone details of the contractor, the dates of payments, and the amounts paid including details of whether the payment included GST. It is estimated that approximately 25,000 entities, including around 12,500 individuals, will have their records obtained each year. This data will be matched with the ATO's data holdings to identify non-compliance with registration, lodgment, reporting, and payment obligations under taxation laws. The program's objectives include identifying contractors who may not be meeting their taxation obligations, verifying the integrity of the Australian Business Register, obtaining intelligence to identify risks and trends about non-compliant contractors, and promoting voluntary compliance. The ATO adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching to protect individual privacy.

Key Provisions

The Australian Taxation Office (ATO) has set out the continuation of its data matching program targeting contractor payments for the 2013-14, 2014-15 and 2015-16 financial years (s1). This program aims to obtain and match details from businesses that are under compliance scrutiny, as well as associated businesses, to ensure taxpayers meet their obligations regarding contractor payments. The data to be collected includes the Australian Business Number (ABN) of both the payer and payee businesses, the contractor’s name, address, telephone details, the dates of payments, and the amounts paid, including whether these include GST (s2). This data will be matched against existing ATO data to identify non-compliance with registration, lodgment, reporting, and payment obligations (s3). The primary goal of this program is to ensure that contractors are correctly fulfilling their tax obligations and to promote voluntary compliance (s4). Entities and individuals involved in contractor payments are required to ensure that they meet their taxation obligations, including registering for the necessary tax purposes, lodging returns, and reporting payments accurately (s5). Businesses that make payments to contractors must obtain and retain the correct ABNs and must report these payments in accordance with tax laws (s6). Contractors must also ensure they are registered for tax purposes and must report their income correctly in their tax returns (s7). The ATO expects all entities to provide accurate and complete information to facilitate the matching process and to maintain the integrity of the Australian Business Register (s8). Breach of the taxation obligations associated with contractor payments can result in various consequences. The ATO may impose penalties for non-compliance, including fines for late lodgment or non-disclosure of payments (s9). In cases of serious or repeated non-compliance, the ATO may take further action, including pursuing legal penalties or initiating investigations into the entity or individual (s10). The maximum penalties can vary depending on the nature and extent of the breach but may include substantial fines and, in severe cases, criminal charges for tax evasion or fraud (s11). The ATO is committed to ensuring that all parties adhere to the tax laws, and it utilises the data matching program as a tool to achieve this objective while protecting the privacy of individuals in accordance with the Office of the Australian Information Commissioner’s guidelines (s12).