Increased Scrutiny on Online Sellers

The Australian Taxation Office (ATO) will now receive details of accounts generating over $12,000 annually to identify hobbyists-turned-businesses and those misreporting income. This move aims to enhance the ATO's understanding of online sellers' behavior and compliance.

Data-Matching Program Target

Amazon and eBay, among the top marketplaces in Australia's $60 billion e-commerce industry, will be required to provide details of up to 30,000 account holders. This program, targeting users with over $12,000 in sales, will help the ATO identify discrepancies in reported income and sales.

Objectives and Implementation

The ATO plans to use the data to detect unregistered businesses and ensure that individuals transitioning from hobby sales to business activities meet their tax obligations. The program will collect personal and business details from sellers to investigate any discrepancies between declared tax returns and online sales.

Market Impact and Compliance

Amazon and eBay are leading platforms in the Australian e-commerce sector. Amazon.com.au alone reported $4.9 billion in merchandise sales in 2023, surpassing eBay in sales earlier this year. The ATO's data-matching initiative will focus on the financial years 2023-24 and 2025-26.

Data Collection and Retention

The ATO will gather extensive data, including sellers' personal information, business and account names, IP addresses, and transaction details. This data will be retained for five years and is not intended for automated compliance actions. Instead, it supports engagement and assurance strategies to boost voluntary compliance through educational or compliance activities.

Expert Insights

Meryl Johnston, founder of Bean Ninjas, an e-commerce accounting firm, noted that non-compliance issues often arise from honest mistakes by sellers with multiple income streams. She emphasized that data availability from Amazon and eBay would enhance the ATO's efficiency in detecting non-compliance compared to traditional brick-and-mortar stores.

Broader Compliance Measures

The ATO's initiative follows similar measures, including a recent program for Medicare levy claims and acquiring rental bond information from 900,000 landlords to tighten compliance around rental bond income. These efforts reflect the ATO's commitment to ensuring accurate income reporting and tax compliance across various sectors.