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Visa data matching available for ATO

Posted by Northadvisory on January 23, 2018

From 1 July 2017, the Australian Taxation Office (ATO) will receive information on holders of a visa from the Department of Immigration and Border Protection. The information received will cover the 2017/18, 2018/19 and 2019/20 financial years.

The data items that will be obtained are:

  • address history for visa applicants and sponsors
  • contact history for visa applicants and sponsors
  • all visa grants
  • visa grant status by point in time
  • migration agents (visa application preparer who assisted or facilitated the processing of the visa)
  • address history for migration agents
  • contact history for migration agents
  • all international travel movements undertaken by visa holders (arrivals and departures)
  • sponsor details
  • education providers (educational institution where a student visa holder intends to undertake their study), and
  • visa subclass name

Of particular importance will be the arrival and departure dates for individuals who are not Australian citizens. This can be matched against income tax returns in order to determine the correct tax treatment between residency and non-residency. Also, capital gains tax transactions may be affected, including taxation of CGT assets on ceasing residency.

As the contact history of migration agents will be shared, an individual’s situation may be scrutinised where an agent has been found to be promoting areas of non-compliance.

Directors of private companies

Individuals with these types of visa situations may be directors of private companies. While there is no restriction when a director is a foreign resident, all proprietary companies in Australia must have at least one company director who ordinarily resides in Australia. Therefore, sole director companies need to be aware of the residency requirements of being a director.

Practitioners who are advising individuals who may be residing overseas for parts of the income year need to be aware of dates when an alternate director needs to be the one making decisions for private companies. This includes situations where a Directors Penalty Notice may be issued by the ATO. Also, company decisions may be determined invalid where a company is not operating within the Corporations Act 2001. This may include director’s resolutions for trust distributions in an income year making the default beneficiary liable for additional tax.

A company will need to be aware of the dates in which a director was a foreign resident as withholding tax may be applicable to the fees.

Risk mitigation steps

The onus is on the client to make sure they are operating within income tax, superannuation and company law. It is best practice to ensure that the client informs you of their movements throughout the income year. That way you can advise them properly on the best course of action for their individual circumstances to avoid any potential liabilities or non-compliance down the track.

In particular, individuals who are travelling between countries may want to ensure the CGT assets are not captured by CGT event I1. Making an appropriate election in the tax return is essential to ensure the ATO does not look to issue an amended assessment.

If you have questions on any of the above issues raised, please do not hesitate to contact us.

Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au