The ATO has announced that it is enhancing data matching with the Department of Home Affairs and intends to audit approximately 20 Million visa holders who are granted visas between 1 July 2017 and 30 June 2020.
The ATO (Australian Taxation Office) is aware of issues where visa holders are not declaring all of their income. For example, some visa holders operate under ABNs making it more difficult to track their earnings. In 2017, 180,000 ABNs were issued to people on tourist visas who are not even allowed to work in Australia. Many tradies have been quoting the ABN for Bunnings when issuing invoices to avoid paying tax.
The Department of Home Affairs provides to the ATO detailed information on visa holders, business sponsors, migration agents and education providers for international students. This includes full visa history, address details, business sponsor details, and the ATO is able to view visa status instantly when a visa holder applies for a Tax File Number (TFN).
The ATO looks at compliance with:
- Reporting and payment of tax and superannuation
- Registration and lodgement of returns
- Foreign investment rules
The ATO may levy fines on visa holders, business sponsors and migration agents, seek to recover outstanding tax and cancelling ineligible ABN registrants.
The ATO may also share data with the Department of Home Affairs on individuals who are working unlawfully in Australia. This may result in fines and other administrative action for employers in breach of the Employer Sanctions Legislation.
Legislation has been introduced to facilitate collection of Tax File Number information when applying for work visas. The legislation, the Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, is currently under review by Senate Committee. The proposed Section 506B to the Migration Act will authorise the collection of Tax File Numbers and it is proposed to do this for applications for certain temporary and permanent employer sponsored visas.
Conclusion
The ramping up of data matching between the Department of Home Affairs and the ATO means that employers need to be more careful than ever to ensure that they are compliant when hiring temporary visa holders. Not only will the ATO be checking that the appropriate level of tax is being paid, but we can expect more referrals back from the ATO to Home Affairs where the employee is working unlawfully.
References:
- ATO – Department of Home Affairs Visa Holders – 2017-18, 2018-19 and 2019-20 financial years data matching program protocol
- Australian Financial Review – ATO Ramps Up Data Matching on International Students and Migration Agents
- Bunnings at the Centre of a Huge Tradie Tax Scam
- Department of Home Affairs FAQs – Do You Share Visa Information with Other Australian Government Agencies?
- SBS – ATO to Audit Visa Holders and International Students
- Australian Parliament House – Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017
