Australian Tax Office chasing unpaid royalties

The Australian Tax Office has obtained royalty payment details of over 15,000 artists and 1000 companies in a bid to crack down on non-compliant taxpayers.

The ATO has the details of some $800 million in royalty collections and payments for the 2011, 2012 and 2013 financial years, which it obtained from APRA AMCOS. The payments will be matched to existing tax records to identify instances of potential non-compliance such as omitted income.

Beginning with a sample of 1000 music industry individuals and companies, the ATO’s program aims to identify non-compliance with various taxation laws to assure payment obligations.

“The ATO collects data from a large number of sources under its data matching program and uses this information to detect cases where tax laws are not being complied with,” said Glenn Burke, Director of Entertainment Accounting & Taxation Services in a statement. “An example of non-compliance would be where the artist does not declare royalty income in their tax return.”

While a representative from APRA AMCOS has told TMN it does not plan on releasing a statement at this point, the collective has posted a message to its members on its official website. Read the message below.

This is an important reminder that, as per our communication to you in early June this year, your APRA AMCOS royalties are considered income for tax purposes and must be declared in your tax return.  

The Australian Taxation Office routinely requests audits of our members royalty earnings and, as per our legal obligations, we have again complied with the ATO’s request this financial year.

We recommend you speak to your personal tax advisor for more information.

According to the Herald Sun, the ATO believes the costs of the investigation will be offset by the large sums regained by non-compliant taxpayers.

“With the size and success of the Australian music industry it was only a matter of time before the ATO commenced music royalty data matching,” Glenn Burke said in a statement. “Musicians who receive royalties should carefully check their tax returns to ensure all royalties received have been declared as income. Where income has not been declared the artist should voluntarily request an amendment to their tax return.”