Opinion: ATO and Department of Immigration Data Sharing Protocol

by External24 Sep 2015
Sarah Thapa outlines the implications of a new initiative that will impact on many sponsors of 457 visa holders.

The Commissioner for Taxation has announced a comprehensive Data Matching Program for visa holders. This will allow the Australian Taxation Office (ATO) to acquire from the Department of Immigration and Border Protection (DIBP) details of visa holders, their sponsors and migration agents.

The program will collect data from an estimated 1 million visa holders and will therefore affect many sponsors currently employing 457 visa holders.

The program will initially focus on the 2013-2017 financial year periods

Purpose of the data matching program
The main purpose of the program is to ensure that taxpayers (including employers and visa holders) are:
  • Accurately completing tax returns and business activity statements;
  • Meeting their pay as you go withholding, fringe benefits tax and superannuation guarantee obligations (including registration, lodgement, reporting and payment); and
  • Correctly managing their tax obligations.
How data matching will affect 457 visa sponsors
457 visa sponsors have a number of obligations, including:
  • Ensuring visa holders earn their guaranteed earnings each year as stated on the 457 visa;
  • Keeping certain records such as records of salaries paid to 457 visa holders; and
  • Notifying the DIBP of certain events, including cessation or expected cessation of employment of 457 visa holders within 28 days.
Importantly for sponsors, the program will enable the DIBP to have oversight as to whether sponsors are meeting their obligations.

Next steps
This is a timely reminder to check how compliant your business is in regards to meeting its sponsorship obligations. This includes ensuring all payroll records are accurate and up-to-date, 457 visa holders' earnings are compliant with their guaranteed earnings and that appropriate notifications to the DIBP have been made in relation to changes in 457 visa holders' employment.

Sponsors who are found not to have met their obligations can be subject to significant fines and sanctions, including cancellation of sponsorship approval and a bar from future sponsorship approval.

Sarah Thapa is managing director of The Migration Agency