Around 350,000 Australian taxpayers will be targeted by the Australian Taxation Office, as it seeks to crack down on those failing to pay the correct tax.
The ATO revealed it would be requesting a further five years’ worth of policy information from over 30 insurance companies about taxpayers who own cars, boats, thoroughbred horses, fine art, high value motor vehicles and aircrafts that exceed the following thresholds:
Motor vehicles: $65,000;
Marine vessels: $100,000;
Thoroughbred horses: $65,000;
Fine art: $100,000 per item; or
Deputy Commissioner Deborah Jenkins said this would help the ATO get a better understanding of the actual financial situation of these taxpayers, compared with what is reported on tax returns.
“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a three million dollar yacht then this is likely to raise some red flags,” Jenkins said.
“Regardless of your level of wealth, we all need to pay the correct amount of tax, and this data will allow us to ensure those people who can afford these kinds of items are doing the right thing, along with everyone else.”
Jenkins said those who were untruthful about their income, or failed to declare capital gains, were “effectively stealing from the community”.
The ATO said the data won’t be used to initiate automated compliance activity, rather the information would be made available to compliance teams to identify incorrect GST, input tax credits where taxpayers are purchasing the assets for purely personal reasons and claiming GST credits as if the item was a business asset.
“If we discover incorrect GST input tax credit claims for items purchased for personal reasons, we’ll be following up and seeking full repayment on top of any applicable interest and penalties,” Jenkins said.
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