Data sharing between the ATO & DOHA
On 3 November 2020, the Commonwealth of Australia issued a Government notice stating that the Australian Taxation Office (ATO) will acquire visa data from the Department of Home Affairs (DOHA) for the financial years ending 30 June 2021 to 2023. This announcement will affect all visa holders, applicants and sponsors for all visas in Australia.
The data items include:
- Address and contact history for visa applicants and sponsors;
- All visa grants
- Visa grant status by point-in-time
- Address and contact history for migration agents
- All international travel movements undertaken by visa holders (arrivals and departures)
- Sponsor details
- Education providers and
- Visa subclass name.
The Government estimates that approximately 10 million individuals will be affected each year.
The data acquired will be matched with the ATO data to identify non-compliance with tax and superannuation laws.
The main objectives of this program are to:
- Ensure visa holders and sponsors register, lodge and correctly report and pay their tax and superannuation obligations;
- Identify fraud or entities exploiting the visa framework;
- Cancel ineligible ABN holders;
- Ensure compliance with Australia’s foreign investment rules; and
- Identify and assist those individuals and businesses who may be failing to meet their registration and/or lodgement obligations.
What does this mean for you as a visa holder, applicant or sponsor?
This means that the ATO will be using the data from DOHA as follows:
1. For a visa holder or applicant – to check if you are currently reporting your income correctly and claiming the correct tax rates. There is a common misconception that a person who is considered a resident for tax purposes has be to a resident for migration purposes. This is incorrect. Residency for tax purposes is different to residency for migration purposes. Temporary resident migrants can be Australian residents for tax purposes. For example, if you are currently living in Australia as the holder of a temporary visa (such as subclasses 188, 482, 485, 489, 491, 500 or a bridging visa), you will be considered a temporary resident for tax purposes and will be taxed on your Australian income only, which means your foreign income is not taxed in Australia. However, if you hold either a bridging visa or a temporary visa and have entered into a spousal or de facto relationship with an Australian citizen or PR, you will be a resident for tax purposes and will be taxed on your worldwide income.
2. For sponsors – to check whether you have been correctly reporting your individual and business’s tax and superannuation obligations to the ATO.
3. For individual visa holders who operate businesses in Australia – to check whether you are an eligible ABN holder and whether you have fully complied with Australia’s foreign investment rules.
That said, not all temporary visa holders will be considered a temporary resident for tax purposes. In the same way, not all Australian permanent residents and citizens will be considered a resident for tax purposes. There are some exceptions. The determination of residency for tax purposes involves the application of a person’s particular circumstances against tax residency rules. In some cases a person may be a resident of more than one tax jurisdiction, thus requiring payment of taxes on the persons total worldwide income. In such circumstances, the provisions of double tax agreement may be used to determine where the tax liability ought to be paid.
Given that both tax and migration are complex areas of law, it is recommended that advice is obtained from lawyers who are both migration and tax specialists.
At Bambrick Legal, our team of experienced registered migration agents are also experienced tax and commercial solicitors who are familiar with the different types of visas as well as your tax and superannuation obligations either as a visa holder, applicant or sponsor. We also offer our clients advice and strategies on asset protection, estate planning and tax-planning.
If you are moving to Australia, are already living in Australia or are operating a business in Australia and would like to know if you are currently meeting your tax and superannuation obligations, contact Bambrick Legal for a free initial consultation with our experienced migration and tax solicitors.
Free initial consultations are available for a limited time only.
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