To ensure our customers pay the right amount of tax at the right time, we develop strategies to maximise compliance, educate the public and conduct investigations to detect cases where outstanding revenue exists.

Our approach

Our compliance strategies rely on accurate and timely data to deliver an accessible, effective and efficient program that will:

  • Obtain a maximum level of voluntary compliance,
  • Ensure customers have a clear understanding of their obligations,
  • Identify risk areas for proactive investigation, and
  • Apply the appropriate remedy for non-compliance

Based on a philosophy to obtain maximum voluntary compliance and promptly address risk-related issues, this approach supports the premise that most of our customers will comply if they are aware of their obligations. Our emphasis, therefore, is always on providing advice, education, assistance and information.

However, we establish expert teams to actively pursue non-compliance when necessary, and this will include penalties and litigation if appropriate.

Customer education

In addition to the information already on our website, we provide a range of customer education services across all revenue lines, including annual payroll tax reconciliation programs, a free email service to receive our latest information about revenue rulings, publications and forms.

Additionally, a private ruling service allows customers to seek assistance in applying specific legislation to their particular circumstance.

We also provide in-house education and training programs for staff, as well as external seminars with professional legal and accounting bodies, to ensure we are expertly placed to appropriately and comprehensively advise customers of their compliance obligations.

Investigation process

In detecting non-compliance, we engage in investigations, field visits and other audits, IT-assisted research, risk analysis, data matching and data mining.

Data, information and audit results are also sourced from external agencies and, in turn, similar information is provided to those agencies to assist in their compliance activities. These agencies include the Australian Taxation Office (ATO), WorkSafe Victoria and other Australian state and territory revenue offices.

With the harmonisation of some tax laws between Australian states, we also share technology and training materials with other jurisdictions.

Voluntary disclosures

Customers who may be in breach of the provisions of the legislation we administer are encouraged to come forward and make a voluntary disclosure. Voluntary disclosures of non-compliance are treated more favourably than non-compliance that we discover during an investigation.

Interest and penalties policies relating to non-compliance are transparent and based on the level of culpability. Penalties usually start at 25 per cent of the primary liability, but can vary depending on the level of culpability and the type of non-compliance.

Our usual compliance investigation process helps to ensure customers are meeting their obligations, as well as protecting their rights.

Any member of the public who wishes to report areas of non-compliance or make a voluntary disclosure to us may do so confidentially by:

In 2015-16, our staff conducted about 10,613 investigations and detected $361.3 million in revenue, including:

  • Payroll tax of $45.0 million
  • Land tax of $90.37 million
  • Landholder of $174.34 million
  • Land rich of $1.06 million
  • Leases of $24.53 million
  • Duties of $18.07 million
  • FHOG of $2.07 million
  • Other of $5.85 million

We also conducted prosecutions where necessary, particularly for FHOG offences. For details about recent prosecutions see our information about FHOG and other prosecutions.

Areas of focus

Back to Work Scheme

To ensure the appropriate administration of the Back to Work Scheme, we:

  • Monitor claims to ensure that all eligibility criteria are met,
  • Gather information via the public, data-matching and other sources to ensure recipients comply with their obligations,
  • Conduct investigations into suspect claims, and
  • Verify voluntary disclosures

A number of automated systems checks are also in place that flag the need to request supporting evidence from the employer. All relevant records and documents must be retained by the employer for five years after lodging the claim and employers must make them available to the SRO on request.  

Further information on your responsibilities as an employer is available on our website or you can contact us.

Any member of the public who wishes to report areas of non-compliance or make a voluntary disclosure to us may do so confidentially by accessing the voluntary disclosures and tip-offs section of our website.

Congestion levy

We aim to improve compliance levels in the collection of congestion levy by:

  • Identifying unregistered owners/operators from land tax data and information obtained from external bodies (such as local councils),
  • Conducting investigations into registered car park owners/operators who fail to lodge returns and pay their levy as a result of default assessments, and
  • Conducting audits on a number of owners/operators who are claiming exemptions for parking spaces

Further information on your responsibilities is available on our website or you can contact us.

Read about some of the more common congestion levy errors, which have been identified as a result of our compliance activity.

Duties

We will ensure compliance with the Duties Act 2000 by investigating and monitoring:

  • Duties Online users who collect duty on behalf of the SRO,
  • Real property valuation issues,
  • Sub-sales,
  • Duties concession claims,
  • Related party transfers,
  • Off-the-plan property sales,
  • Transfers involving high-value properties,
  • Transfers and grants of long-term leases over land in Victoria,
  • Exemption claims,
  • Land rich and landholder acquisitions,
  • General insurers,
  • Insurance business placed with overseas or unregistered insurers,
  • Licensed motor car traders and motor vehicle purchasers, 
  • Foreign purchaser surcharge, and
  • Changes in the beneficial ownership of land held in fixed trust and partnership structures

ATO, Residential Tenancies Bond Authority and VicRoads data will be used to assist us in targeting areas of non-compliance and to ensure case selection effectiveness.

Further information on your responsibilities is available on our website or you can contact us.

Read about some of the more common duties errors, which have been identified as a result of our compliance activity.

First Home Owner Grant (FHOG)

The FHOG is not intended to be used for the purchase of an investment property. Accordingly, we gather information via the public, data-matching and other sources to ensure recipients of the grant comply with the residence requirement.

We will continue conducting a voluntary disclosure program with respect to non-compliance with the residency requirement.

Tax evasion and false statements

Where we detect instances of dishonesty, we will conduct prosecution activity. We have successfully prosecuted a number of FHOG applicants for making false declarations in their grant application or subsequent statutory declaration, or for not advising of failure to meet the residency requirement.

For details about recent prosecutions, see our information about FHOG and other prosecutions.

Further information on your responsibilities is available on our website or you can contact us.

Read about some of the more common FHOG errors, which have been identified as a result of our compliance activity.

Land tax

We develop and maintain compliance strategies aimed towards achieving maximum compliance among land owners in relation to their statutory obligations. This includes data-matching techniques to detect non-compliance.

To ensure compliance with land tax legislation, we will:

  • Ensure that primary production exemptions from land tax are valid,
  • Ensure that corporate entities, which should be grouped for land tax purposes, are grouped,
  • Utilise data-matching of rental information to ensure that principal place of residence (PPR) exemptions are applied correctly and that trust holdings have been declared,
  • Use other data to identify whether holiday homes are being taxed correctly,
  • Conduct investigations into leases of crown land used for commercial purposes,
  • Use ATO, Department of Primary Industries, Residential Tenancies Bond Authority and council data to target areas of non-compliance and ensure case selection effectiveness, and
  • Utilise resources to correctly apply the absentee owner surcharge

Further information about your responsibilities is available on our website or you can contact us.

Read about some of the most common land tax errors, which have been identified as a result of our compliance activity.

Payroll tax

To maintain compliance with payroll tax legislation, we will:

  • Identify and investigate employers who fail to lodge and pay amounts owing under their annual reconciliation,
  • Identify employers who fail to lodge regular returns and monitor payment patterns,
  • Conduct field/desk audits of registered and unregistered employers throughout Victoria and interstate,
  • Detect employers whose total wages exceed the monthly exemption levels and have not registered for payroll tax,
  • Conduct audits on specific compliance issues, such as inclusion of grossed up fringe benefits, superannuation, director's fees, management fees, grouping, contractors, employment agents, financial planners and employee share acquisition schemes,
  • Verify voluntary disclosures and refund claims,
  • Use audit results from other revenue offices and other regulatory bodies including WorkSafe Victoria and the ATO to ensure case selection effectiveness,
  • Conduct audits of common employers on behalf of other jurisdictions,
  • Conduct investigations into possible under-payments on defined benefit superannuation scheme top-ups,
  • Conduct compliance program in the security industry,
  • Conduct an education mail out to employers approaching the threshold,
  • Examine the arrangements of labour hire firms/employment agencies,
  • Conduct investigations into large taxpayers,
  • Conduct industry specific projects,
  • Participate in a national fringe benefits tax audit program,
  • Continue to undertake the Payroll Tax Annual Reconciliation Education Program in May and June each year,
  • Conduct regular programs for new registrants for payroll tax,
  • Conduct webinars on specific issues,
  • Examine arrangements where employees at common law are incorrectly characterised as contractors, and
  • Closely monitor potential phoenix company activity

For further details, see the fraudulent phoenix companies in government spotlight [Word format] and the ATO website (www.ato.gov.au).

Further information on your responsibilities is available on our website or you can contact us.

Employers who also pay wages outside of Victoria may wish to visit payrolltax.gov.au for access to harmonised payroll tax documentation, legislation, state and territory contacts and education opportunities.

As an employer you may need to take out a WorkSafe insurance policy. For information about WorkSafe employer compliance, please visit their website.

Read about some of the more common payroll tax errors, which have been identified as a result of our compliance activity.

Unclaimed money

To ensure the appropriate administration of unclaimed money, we will:

  • Focus on compliance activities of larger companies. This will include monitoring these companies to ensure they meet their obligations regarding the lodgement of unclaimed money,
  • Conduct investigations into suspect unclaimed money claims,
  • Continue to publicise the unclaimed money function in various forums including newspapers, and
  • Ensure returns are lodged by 31 May and penalise late lodgements

Further information on your responsibilities is available on our website or contact us.

Read about some of the more common unclaimed money errors, which have been identified as a result of our compliance activity.