In respect of the above, the ATO would initially seek to receive annual reports and then seek to move to quarterly, monthly or “real time” reporting.
The paper sets out a preliminary set of law design principles that could form the legislative basis for the new reporting regimes. However, it notes that the final form of any draft legislation would depend on the final form of the policy design and this, in turn, will be informed by the outcomes of the consultation process. Accordingly, the government says it is seeking feedback on policy issues and, in particular, and SMEs should take note, the compliance cost impacts of the proposed reporting regimes.
The proposed reporting regimes would be designed so that in most cases third parties would only need to provide information to the ATO that they receive or record in the ordinary course of their business or operations. That’s fine, but it doesn’t mean a third party won’t incur costs in reporting the new information. However, as an effective third party reporting regime depends on the ATO being able to match the reported data to the relevant taxpayer, some additional identifying information may be required.
For individuals, the minimum amount of identifying information needed to provide high confidence identity matching for tax purposes is their name, address and either date of birth or TFN. However, it is important to note there are tax and privacy law restrictions on requesting, recording and using TFNs which would need to be taken into account when considering the use of TFNs in these proposed reporting regimes. For business taxpayers (including individuals in a business), the minimum information is name, address and either an ABN, ACN or TFN.
Whilst it is likely that many of the proposed reporting entities currently collect an entity’s unique identifiers in the ordinary course of their activities, there may be some that do not. The paper says these entities would be required to collect this additional information and report it to the ATO under the proposed reporting regimes.
SMEs should note that comments on the Treasury paper are due by 11 March 2014, with details on the Treasury website.
The range of data being collected by the Tax Office is ever expanding. Businesses should not underestimate the use to which this data will be put. It’s trite to say, but Big Brother is alive and well – even if that data does help with the pre-filling of tax returns.
Terry Hayes is the editor-in-chief of tax news reporting at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.
Terry Hayes is the editor-in-chief of tax news reporting at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.
