ATO data matching for 457 visa holders – issues for business

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, particularly relating to the 2013-2017 financial year periods. The program will collect data from an estimated 1 million visa holders and will therefore affect many sponsors currently employing 457 visa holders.

The Data Matching Program

The purpose of the program is to ensure that taxpayers (sponsors and 457 visa holders) are:

  • Completing correct tax returns and business activity statements
  • Meeting their registration, lodgement, reporting and payment obligations for pay as you go withholding, fringe benefits tax and superannuation guarantee; and
  • Correctly managing their tax obligations.

How does this impact sponsoring businesses

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, including third-party verifiable records of salaries to 457 visa holders; and
  • Notifying the DIBP of certain events, including cessation of employment of 457 visa holders within 28 calendar days.

This program will provide 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

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