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Strengthened Data Matching: Australian Taxation Office Expands Data Matching

The Australian Taxation Office (ATO) has expanded its data-matching capabilities. By collaborating with various stakeholders, including property managers, financial institutions, insurance providers, and sharing economy platforms, the ATO aims to ensure taxpayers accurately report their income and deductions.

Improved Accuracy in Rental Property Reporting:

The ATO's data analysis reveals that a significant number of rental property owners, approximately nine out of ten, make errors in their tax returns. To rectify this, the ATO will now receive additional data from investment loan providers and landlord insurance companies.

Approximately 87% of individuals who own rental properties use registered tax agents to lodge their returns. The ATO encourages taxpayers to provide their agents with accurate and complete information to ensure the correct preparation of their returns.

Sharing Economy Reporting Regime:

The rise of the sharing economy has presented new challenges in tax reporting. To address this, the ATO has implemented the Sharing Economy Reporting Regime (SERR), starting from July 2023. The SERR mandates that electronic distribution platforms providing taxi services, ride-sourcing, and short-term accommodations report income data to the ATO. By 2024, all other electronic distribution platforms will also be required to comply with this regulation.

Enhanced Oversight of Income Protection Insurance:

The ATO has extended its data matching capabilities to income protection insurance policies, enabling them to monitor premiums paid and payouts received. Taxpayers can generally claim a deduction for income protection insurance premiums they personally pay. However, if the insurance policy is paid by a super fund, the deduction cannot be claimed. Additionally, any income protection insurance payouts, whether from personal policies or super fund policies, must be included in the tax return.

It is important to note that taxpayers remain responsible for the accuracy of their tax returns, even when utilising the services of tax agents.
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