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The Tax Office will receive details of accounts that make over $12,000 a year to identify hobbyists-turned-businesses and those misreporting income.
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ATO to crack down on Amazon, eBay sellers’ tax affairs
11 July 2024
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The Tax Office will force Amazon and eBay to hand over details of up to 30,000 account holders to crack down on sellers who misreport income in their BAS and tax returns.
The data-matching program would target users who make more than $12,000 in sales, according to a government gazette notice this week, with the ATO gaining access to their personal, business and account details.
“The data helps us increase our understanding of the behaviours and compliance profiles of individuals and businesses that sell goods or services via online selling platforms,” the ATO said.
The ATO said it planned to use the information to detect unregistered businesses operating in the digital space and ensure taxpayers who have gone from selling as a hobby to carrying on a business complied with their tax obligations.
“Where the online selling data reveals discrepancies between online sales and information declared in the sellers' tax returns, we will investigate further,” it said.
Amazon and eBay are the top marketplaces in Australia’s $60 billion e-commerce industry.
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The total value of merchandise sold through Amazon.com.au totalled $4.9 billion in 2023, with the e-commerce giant surpassing eBay in sales earlier this year.
The ATO has conducted online seller data matching programs since 2008.
Its latest initiative would see it collect sales data for the 2023-24 and 2025-26 financial years and compel Amazon and eBay to hand over sellers' personal details, such as their name, date of birth, residential address, phone number and email address.
To detect discrepancies between online sales and reported income, the ATO would also collect details of businesses and accounts, including their business and account name, IP address of the account holder, number and value of monthly and annual sales transactions.
Meryl Johnston, founder of e-commerce accounting firm Bean Ninjas, said non-compliance issues could arise from people with multiple income streams making honest mistakes by forgetting to include income from certain platforms.
“When we start working with new clients, we do see mistakes where sometimes an entire sales platform, particularly if it's not their main channel will just be left off and not connected to Xero, and so then what's being submitted to the ATO is actually missing some of that information,” she said.
“It's normally a mistake. It's not that people are purposely not doing the wrong thing.”
Johnston said the availability of data from Amazon and eBay would help the ATO detect on-compliance among businesses more efficiently compared to traditional brick-and-mortar stores.
“It would be easier to data match with Amazon and eBay than if you had a shopfront with people coming in, making some purchases through a credit card or debit card, and then some cash,” she said.
“They’re going to match up to 30,000 accounts – it would be pretty hard to do that with brick-and-mortar stores.”
The ATO expected the “sophisticated” systems used by Amazon and eBay to result in data “of a high standard”.
It said that each financial year would be retained for five years and would not be used to initiate automated compliance activity.
“The program supports the development and implementation of engagement and assurance strategies to increase voluntary compliance, which may include educational or compliance activities. It gives assurance that participants are doing the right thing,” the ATO said.
The ATO’s online seller data matching program comes after it announced one for Medicare levy claims last month.
In February, the ATO acquired personal details and rental bond information of 900,000 landlords from state and territory rental bond regulators to tighten compliance around rental bond income.
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