Detection
We use sophisticated data-matching techniques to detect and assess non-compliance. This includes data exchanged with other revenue offices, government agencies and third parties such as financial institutions, utility companies and vendors or other parties involved in a transaction.
For example, our land tax data-matching programs use ATO rental and trust records as well as data from the Residential Tenancy Bond Authority to identify incorrectly claimed exemptions and trust notification defaults.
Each year, we refine our data-matching programs and build our data warehouses to ensure we maintain our high strike rates on investigations and success rate on litigation. Our aim is to minimise any imposition on compliant customers and only engage with those customers who are non-compliant.
Investigations and litigation statistics
Our well-trained staff and robust data-matching programs achieved the following results for the 2023–24 financial year:
- We completed more than 11,906 investigations and assessed $733 million in tax, including $32 million in penalties.
- We achieved a strike rate of over 97% on investigations and received only 773 valid objections.
- Of those objections lodged, only 119 were allowed in full following an independent review, with the remainder being disallowed in full or part.
- Only 15 objection decisions proceeded to hearing at VCAT or the Supreme Court of Victoria, 13 of which were decided in favour of the Commissioner.
Voluntary disclosures
Prior to or during an investigation, you can voluntarily disclose your liability to tax to obtain reduced rates of penalty tax and interest. In certain cases, a cap on the imposition of interest may apply if the disclosed liability occurred more than 5 years in the past.
Investigations
Generally, we will only select you for an investigation if we have obtained information that indicates you may have an outstanding tax liability or are ineligible for a claimed exemption, grant or concession. From time to time, particular industries or market sectors may be targeted where non-compliance is identified as a result of an industry-wide practice.
Areas of focus
In 2024–25, our areas of focus will include:
Payroll tax
- Unregistered employers, including payroll tax groupings
- Undisclosed wages with a strong focus on employee share scheme, fringe benefits and contractor payments
- Labour hire arrangements
Land tax
- Land tax exemptions with a strong focus on lands exempt under the principal place of residence and primary production exemption
- Land held on trust and subject to the surcharge rate of tax
- Absentee owners of land, including land tax groupings
Vacant residential land tax
- Undisclosed vacant properties
- Residential properties claiming the holiday home exemption
Land transfer duty
- Changes in the beneficial ownership of land held in partnerships, including sub sales transactions
- Value of land holdings transacted between related parties or as part of a larger business sale agreement
- Exempt transactions with a strong focus on those transactions that have claimed the principal place of residence concession and/or the first home buyer duty exemption/concession
Landholder duty
- Offshore changes in the ultimate holding companies of Victorian landholders
- Acquisitions in landholders that own commercial and industrial properties in Victoria with a strong focus on landholders with renewable energy or data centre assets
Insurance duty
- Unregistered insurers with a strong focus on airline and shipping carriers with regular services into Victorian airports and ports
Motor vehicle duty
- LMCT dealers that have obtained exemptions on luxury vehicles which they have not sold and continue to own for a period of greater than 12 months
- Transfers of vehicles below market values
First Home Owner Grant
- Applicants that have failed to meet the residency requirements of the grant
- Applicants that have failed to disclose that they or their partner have received a grant in the past
If you are selected for an investigation, we are here to help you understand your rights and obligations under the law. If you wish to be represented by a professional adviser, we are happy to deal with them on your behalf.
At any time during an investigation, you can disclose your tax liability to access reduced rates of penalties. Additionally, your cooperation and assistance in resolving your matter in a timely manner is taken into account by us in remitting penalties.
However, if you fail to cooperate by not providing all relevant information in a timely manner or provide false or misleading information, your conduct may be regarded as hindrance of the investigation or the concealment of information.
In such circumstances, a higher rate of penalty tax may be imposed in relation to your tax default. Your tax liability may also be assessed on an estimated basis by us and your only recourse to correct the liability will be through the objection process, which will require you to provide all relevant information to prove your case.
The requirement to pay an assessment will not be removed on the lodgement of an objection. Interest will accrue while an assessment remains unpaid and in certain cases we may place a charge on your property and/or commence winding-up or recovery proceedings to safeguard the collection of the tax.
What to expect from us during an investigation
In accordance with our customer service charter, if you are selected for an investigation, we will:
- clearly explain why you have been selected for investigation
- provide you with a reasonable amount of time to produce your records
- treat your affairs in strict confidence
- provide you with the expected duration of the investigation
- give you an opportunity to seek independent advice, including valuation evidence if required
- give you an opportunity to explain the reasons for your tax default and seek remission of penalties, including interest
- favourably consider your cooperation and the provision of information within the required time frames in determining the applicable rate of penalties and interest.
What we expect from you during an investigation
During an investigation, we expect that you will:
- be courteous, cooperative and honest
- tell us if you have or think you have made a mistake with your taxes, and how and why the mistake occurred
- provide prompt, full and free access to all relevant information, documents, data and systems, including personnel, if required
- provide timely, accurate and complete responses to our requests for information
- work with us to resolve your tax obligations in the most effective manner.
Customer survey
At the end of an investigation, you may receive a request for feedback from us. We value your participation with this survey, which helps us to continually enhance our processes and improve voluntary compliance.
Tip-offs
We also encourage public participation in our compliance efforts by providing a tip-off channel to anonymously report suspected non-compliance. If you are aware of or suspect that a person is not complying with their Victorian tax obligations, you can submit an anonymous tip-off using the link below.
