How we use online selling data
The data collected under this program will be used in analytical models along with other ATO held data to identify, assess and treat high risk activity.
Where the online selling data reveals discrepancies between online sales and information declared in the sellers' tax returns, we will investigate further.
The data helps us increase our understanding of the behaviours and compliance profiles of individuals and businesses that sell goods or services via online selling platforms.
It also helps in identifying taxpayers who may be failing to meet their registration or lodgment obligations, such as for those transitioning from a hobby to carrying on a business and assisting with reviewing entitlement to an ABN.
The program supports the development and implementation of engagement and assurance strategies to increase voluntary compliance, which may include educational or compliance activities. It gives assurance that participants are doing the right thing.
The data in this program will not be used directly to initiate automated compliance activity.
Previous related programs
We have been conducting similar programs since 2008, with data collection dating back to the 2004–05 financial year. The ongoing collection of this data enables us to review and educate online sellers who may be transitioning from hobby status to being in business.
Online selling data is used to deliver compliance outcomes for registration, income tax and GST from taxpayer audits, voluntary disclosures and lodgments.
The data collection has promoted awareness in the community of our data-matching capabilities. Publishing the data-matching protocol generates media interest, which promotes awareness and education of the risk.
Data providers
We are the matching agency and, in most cases the sole user of the data obtained during this data-matching program.
We obtain data from the following providers:
- eBay Australia and New Zealand Pty Ltd
- Amazon Commercial Services Pty Ltd.
Eligibility as a data provider
We adopt a principles-based approach to ensure that our selection of data providers is fair and transparent.
Inclusion of a data provider is based on the following principles:
- the data owner or its subsidiary operates a business in Australia that is governed by Australian law
- the data owner provides an online marketplace for businesses and individuals to buy and sell goods and services
- the data owner tracks the activity of registered sellers
- the data owner has clients whose annual trading activity amounts to $12,000 or more for the 2018–19 to 2025–26 financial years
- the data owner provided an online marketplace for the years in focus.
If the client base of a data provider does not present a risk, or the administrative or financial cost of collecting the data exceeds the benefit the data may provide, the data owner may be excluded from the program.
The data providers for this program will be reviewed annually against the eligibility principles.
Our formal information gathering powers
To ensure statutory requirements are met, we obtain data under our formal information gathering powers. These are contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.
This is a coercive power, and data providers are obligated to provide the information requested.
We will use the data for tax and superannuation compliance purposes.
Privacy Act
Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act and in particular:
- APP6.2(b) – the use of the information is required or authorised by an Australian law
- APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for our enforcement-related activities.
Data elements we collect
We will collect data from online marketplaces whose registrants sold goods or services with a total annual value of $12,000 or more in the applicable financial year.
We negotiate with the selected data providers individually to obtain data held within their systems. The collected data may contain all, or a selection of the fields listed below.
Client identification details – individuals
Identification details include:
- given and surname
- date of birth
- account holder’s addresses (residential, postal, other)
- Australian business number
- email address
- contact phone number
Client identification details – non-individuals
Identification details include:
- business name
- addresses (business, postal, registered, other)
- Australian business number
- contact name
- contact phone number
- email address
Account details
Account details include:
- account name
- account identification number
- account registration date
- account registration type
- store type
- seller status
- IP address
- number of annual sales transactions
- value of annual sales transactions
- number of monthly sales transactions
- value of monthly sales transactions
Number of records
We estimate the total number of account records obtained to be between 20,000 and 30,000 each financial year. We expect approximately 10,000 to 20,000 matched records will relate to individuals.
Data quality
We anticipate that the data quality will be of a high standard. Online market providers have sophisticated computer systems. The data providers' systems facilitate processing of information about their members' transactions.
Data retention
We collect data under this program for all financial years from 2018–19 to 2025–26. We collect this data annually following the end of each financial year.
We work with the data providers and aim to balance our requests against peaks and troughs of demand in a data provider's own business.
We destroy data that is no longer required in accordance with the Archives Act 1983, and the records authorities issued by the National Archives of Australia, for both general and ATO-specific data.
We retain each financial year’s data for 5 years from receipt of the final instalment of verified data files from the data providers.
The data is required for this period for the protection of public revenue:
- Retaining data for 5 years enables us to conduct long-term trend analysis in the constantly evolving online selling market to develop targeted assistance and education programs.
- The data enhances our ability to identify taxpayers who may not be complying with their tax and super obligations, which is integral to protecting the integrity of the tax and superannuation systems.
- Retaining data for 5 years supports our general compliance approach of reviewing an assessment within the standard period of review and aligns with the requirements for taxpayers to keep their records.
- The data is also used in multiple risk models, including models that establish retrospective profiles over multiple years aligned with period of review.
While increased data retention periods may increase the risk to privacy, we have a range of safeguards to manage and minimise this. Our systems and controls are designed to ensure the privacy and security of the data we manage.