ATO Crackdown on Non-compliant Behaviors in terms of Share Transactions

Sustainability and MaterialityIt is one of the prime responsibilities of The Commissioner of Taxation to ensure that Taxpayers meet their taxation and superannuation obligations. Failure to address non-compliant behaviors will potentially undermine the public’s confidence in the credibility and reliability of the taxation and superannuation systems, it will also raise concerns about the ATO’s capacity in administering these systems.

Therefore, Share Transactions Data Matching Program Protocol was introduced by the ATO in the year 2014 as one of the strategies to identify and deal with non- compliant behaviors, more importantly, it ensures that Taxpayers are correctly meeting their taxation obligations in respect of their share transactions.

This Matching Program will source details of share acquisitions and sales from major Companies that offer share transaction services from 20 September 1985 to 30 June 2016. It collects data that includes the name and address of the Taxpayer and the price & number of shares acquired or sold. The collection of data occurs twice annually covering the periods January to June and July to December, occurring during the quarter following the end of periods.

The main actions resulting from this Program are as follows:

  1. Those, who have an obligation to lodge their outstanding taxation returns but have not done so, will be identified by the ATO and be reminded of their outstanding lodgement;
  2. The date generated from this program will become available to Taxpayers on an annual basis at the time when they are lodging their tax returns via electronic pre-fill channels, which informs them of their obligations to report their capital gains from share transactions;
  3. Those that are not registered for their taxation obligation are more likely to be identified by the ATO through this program and accordingly, their taxation obligations will be required to be registered;
  4. A minimum twenty-eight (28) days will be provided to Taxpayers for them to respond any discrepancy matching obtained by the ATO before any administration action is taken. However, if Taxpayers fail to comply with their taxation obligations after being reminded of, prosecution action may be taken; and
  5. This program also requires Taxpayers to comply with their taxation and superannuation obligations, including registration requirements, lodgement obligations and payment responsibilities.

As you can see from the above, this Share Transactions Data Matching Program Protocol promotes the integrity of the taxation and superannuation systems and instils further community confidence. In particular, it allows the ATO to be in a better position to identify non-complaint behaviours, which would enhance the recovery of the taxation revenue.

However, it should be reminded that the implementation of this program will also bring additional costs associated with obtaining and storing the data to the ATO and will require more data analyst, compliance and governance resources.

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