ATO data-matching: residency

The ATO has announced that it will be conducting a new data-matching program with information from the Department of Home Affairs on passenger movements during the 2016-17 to 2022-23 income years. It will use this data to determine whether business entities and individuals are residents and whether they have met their lodgment and registration obligations.

There are four statutory tests to determine residency, ie resides test, domicile test, 183-day test, and the commonwealth superannuation test. Note that separate rules exist for working holidaymakers and individuals who are tax residents of more than one country.

For business entities, the residency criteria differ depending on the structure (ie sole trader, ordinary partnership, company, corporate limited partnership, or a trust). Businesses under the sole trader or ordinary partnership structure are considered to be Australian residents with resident tax obligations if the individual(s) behind them is a resident.

A company is considered a resident if incorporated in Australia while those not incorporated in Australia may be an Australian resident if its central management and control are in Australia or its voting power is controlled by shareholders who are residents of Australia.

The data to be collected by ATO will include full name, personal identifier, date of birth, gender, arrival date, departure date, passport information (including travel document ID and country code), and status types (eg visa status, residency, lawful, Australian citizen). It is expected that the personal information of approximately 670,000 individuals will be collected and matched each financial year.

According to the ATO, the compliance activities from data obtained will largely be confined to verification of identity and residency status for registration purposes as well as identifying ineligible claims for tax and superannuation entitlement. In addition to compliance activities, the data will also be used to refine existing ATO risk detection models, improve knowledge of the overall level of identity and residency compliance risks, and identify potential new or emerging non-compliance and entities controlling or exploiting ATO methodologies.