Australian Tax Office Turns Attention To Investment Income

by Mary Swire, Tax-News.com, Hong Kong

27 September 2005

Australian Tax Commissioner Michael Carmody has revealed that the Australian Tax Office is extending a data matching programme in an attempt to ensure that investors are paying the appropriate amount of tax on income from share dividends and stock sales.

According to Mr Carmody, the new crackdown on those suspected of avoiding tax on dividend and share sale income is an extension of a successful data matching exercise by the ATO last year against those who failed to pay capital gains tax.

Under this scheme, the ATO initiated 3,300 audits after matching 25,000 tax returns against property sale records, collecting a total of A$30 million (US$22.7 million) in additional tax revenues in the process.

"This year we will also match data on share market transactions to ensure capital gains realised are correctly returned," stated Mr Carmody. He added that the ATO is also refining its data matching technology to try and catch those who are failing to pay tax on dividend income from foreign shares and overseas-based bank accounts.

The ATO uncovered the under-reporting of A$176 million in tax by 320,000 taxpayers last year - which equates to about 3% of all taxpayers - after their tax returns had been matched against 36 million third-party records.

Recommended