Visa data matching available for ATO
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.
“From 1 July 2017, the ATO will receive information on holders of a visa from the Department of Immigration & Border Protection for the 2017/18, 2018/19 and 2019/20 financial years.”
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
“Arrival and departure dates for individuals who are not Australian citizens will be matched against income tax returns to determine the correct tax treatment between residency and non-residency — with potential implications for CGT assets on ceasing residency.”
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
The ATO’s visa-data matching program offers a direct link between immigration records and tax/super obligations.
Visa histories, travel movements and residency status from the Department of Home Affairs can now trigger tax or super compliance reviews for visa-holders.
Residency status — and timing of arrivals/departures — matters more than ever.
The ATO can match visa and travel data with tax returns to reassess residency for tax purposes, which could affect assessable income, deductions and Capital Gains Tax (CGT) implications.
Employers and sponsors of visa-holders face increased compliance risk.
Data-matching allows the ATO to identify whether employers have correctly applied PAYG withholding, super guarantee obligations, and whether visa-holders are working under permitted conditions.
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Frequently Asked Questions
What is the ATO visa-data matching program?
It’s a data-matching initiative where the ATO obtains visa and immigration data from the Department of Home Affairs. This includes visa grants, visa statuses, arrival and departure history, and other visa-related records, for the purpose of verifying tax, superannuation and residency compliance.
What type of visa-data does the ATO collect?
Data may include address and contact history of visa holders and sponsors, visa grant and subclass information, visa grant status at given dates, migration-agent involvement (if any), and records of international travel movements (arrivals and departures).
Who can be affected by this data-matching program?
Visa holders (temporary or permanent), sponsors (employers or individuals), migration agents, employers of visa-holders — especially if they are directors of companies, or if their visa/residency status impacts tax, super, company-law or capital-gains obligations.
What kinds of tax or compliance risks does visa data matching help the ATO detect?
The program helps detect issues like incorrect tax residency claims; undeclared income; failure to comply with PAYG withholding, superannuation or employer obligations for visa-holders; misuse of ABNs by non-residents; unreported CGT events on departure; and non-compliance by sponsors or migration agents.
What should employers or visa-holders do to stay compliant under this program?
They should keep accurate records of visa status, arrival/departure dates, employment/sponsorship details, PAYG withholding and super contributions. Employers sponsoring visa-holders should ensure correct tax/reporting obligations are met and be ready to substantiate income, residency or superannuation claims.
Why is this data important for the ATO?
The ATO uses arrival and departure data to help determine whether an individual should be treated as an Australian tax resident or non-resident, which affects tax obligations and capital gains tax treatment when residency ceases.
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