The nation's tax agency will soon acquire a state-by-state database of motor vehicle registrations.
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The Australian Tax Office has announced it will access vehicle purchasing data by state in an effort to potentially catch out tax-evading individuals and businesses.

"The Australian Taxation Office (ATO) will acquire motor vehicle registry data from state and territory motor vehicle registry authorities for 2019–20 through to 2021–22," the ATO said in a policy notice.

This data will include the names, addresses, ABNs or company numbers for sole traders and business owners, as well as the sale price of their vehicles, the vehicle's garage address, the make and model and whether or not the buyer received a stamp duty exemption – among other things.

The ATO said it estimates the new policy will allow it to obtain the registration records of roughly 1.5 million people for every financial year.

The government agency will then cross-check the registration data with its internal data holdings to determine whether taxpayers are complying with their taxation or superannuation obligations.

In layman's terms, this means the ATO will be able to "flag potential taxpayers of interest," explained Elinor Kasapidis, Senior Manager of Tax Policy at CPA Australia – Australia’s leading professional accounting body.

"For example, the owner of a new Ferrari with no reportable income or a licenced dealer reporting unusually low luxury car tax," Ms Kasapidis said.

The move also has potential ramifications for business owners who have accessed the government's recently-expanded instant asset write-off scheme,

"The instant asset write-off is subject to value thresholds, which for cars is $57,581 for the 2019-20 income year. Registry data will help the ATO identify people who may have over-claimed," Ms Kasapidis said.

"Other examples which could raise a red flag include buying the family car through a company or purchasing a new car each year."

If you're in doubt, it's worth checking with your relevant accountant or financial advisor to ensure you're compliant.

"Car purchases can have a variety of tax implications, including GST, fringe benefits tax, luxury car tax, fuel schemes and income tax," Ms Kasapidis advised.

"If you’re concerned about the tax implications of your car purchase, seek advice from a registered tax agent.”