Explanatory StatementClasses of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017
General Outline of Instrument
- This instrument is made under subsection 396-70(4) of Schedule 1 to the Taxation Administration Act 1953 (TAA).
- This instrument exempts administrators of a payment system (within the meaning of the Payment Systems (Regulation) Act 1998) from having to include specified classes of transactions in reports prepared and lodged in relation to item 9 in the table in section 396-55 of Schedule 1 to the TAA.
- Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
- This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Date of effect
5. This instrument commences on 1 July 2017.
Repeal of previous instrument
6. This instrument repeals and replaces Instrument F2016L00527 Classes of Electronic Payment System Transactions Exempt From Providing Third Party Reports Determination 2016 registered on 15 April 2016.
What is this instrument about
7. Item 9 in the table in section 396-55 of Schedule 1 to the TAA requires an administrator of a payment system (within the meaning of the Payment Systems (Regulation) Act 1998) to report a transaction involving an electronic payment if the transaction is facilitated on behalf of an entity, and the administrator reasonably believes that the transaction was a payment to the entity, a refund or cash withdrawn by a customer of the entity, and is for the purpose of a business carried on by the entity.
8. Paragraph 396-70(4)(b) of Schedule 1 to the TAA allows the Commissioner, by legislative instrument, to exempt specified classes of transactions from being reported.
9. Paragraphs 5(a), (b) and (c) of this instrument exempt specified classes of transactions from these reporting requirements.
The reporting exemption provided by paragraph 5(a)
10. Paragraph 5(a) of this instrument exempts authorised deposit-taking institutions, for the purposes of the Banking Act 1959, from reporting transactions which have been initiated by another entity where that other entity is required by item 9 in the table in section 396-55 of Schedule 1 of the TAA to report the transactions to the Commissioner.
The reporting exemption provided by paragraph 5(b)
11. Paragraph 5(b) of this instrument exempts administrators of a payment system from reporting payments processed by Framework Participants under the High Value Clearing System governed by Australian Payments Clearing Association Limited.
The reporting exemption provided by paragraph 5(c)
12. Paragraph 5(c) of this instrument exempts administrators of a payment system from reporting the following classes of transactions:
a) Payments made to a carriage service provider (within the meaning of the Telecommunications Act 1997).
b) Payments made to a utility for the provision of electricity, water, sewerage or gas.
c) Payments made to a government related entity (within the meaning of section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999).
d) Payments made to a general insurer which are received in the course of the insurer’s insurance business (within the meaning of the Insurance Act 1973).
e) Payments made to a life insurer which are received in the course of the insurer’s life insurance business (within the meaning of the Life Insurance Act 1995).
f) Payments made to a private health insurer which are received in the course of the insurer’s health insurance business (within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015).
g) Payments made to a superannuation fund, approved deposit fund, or pooled superannuation trust (within the meanings of the Superannuation Industry (Supervision) Act 1993) or RSA provider (within the meaning of the Retirement Savings Accounts Act 1997).
Reporting transactions exempt from being reported by paragraph 5(c)
13. If not reporting transactions exempted from the reporting requirement by paragraph 5(c) of this instrument would increase the administrative burden on an administrator of a payment system, the administrator may, despite the exemption, report those transactions.
What is the compliance effect of this instrument
14. The list of exempted transactions provides certainty and a potential reduction in compliance cost for entities that may be impacted by the third party reporting legislation.
15. Compliance Cost Impact: Minor – There will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
Consultation
16. In October/November 2015, the Australian Taxation Office (ATO) undertook consultation with key stakeholders such as the Australian Bankers Association (ABA), Australian Payments Clearing Association Limited (APCA), Customer Owned Banking Association (COBA), financial institutions, and payment administrators on the content to be included in the Legislative Instrument. Formal public consultation on the draft Legislative Instrument commenced on the 15 December 2015 and concluded on 15 February 2016. All reporting entities and the public were invited to participate in the consultation. At the conclusion of the consultation window, the ATO received two submissions from reporters raising a number of issues/concerns. Separate to this, the ATO also received an additional request for consideration via telephone that was directly related to the Legislative Instrument. After consideration of the issues raised out of consultation, the ATO has agreed with some of the issues raised and made some changes to the Legislative Instrument and data specifications. Not all issues raised could be adopted by the ATO as the issues raised were inconsistent with the policy intent or not administratively feasible. Feedback was provided to the reporting entities that made a submission via consultation or telephone call on what the ATO could amend and what could not be adopted.
Legislative references:
Human Rights (Parliamentary Scrutiny) Act 2011
Legislation Act 2003
Payment Systems (Regulation) Act 1998)
Taxation Administration Act 1953
Acts Interpretation Act 1901
Banking Act 1959
Telecommunications Act 1997
A New Tax System (Goods and Service Tax) Act 1999
Insurance Act 1973
Life Insurance Act 1995
Private Health Insurance (Prudential Supervision) Act 2015
Superannuation Industry (Supervision) Act 1993
Retirement Savings Accounts Act 1997
Statement of Compatibility with Human Rights
This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Classes of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
This Legislative Instrument exempts administrators of payment systems (within the meaning of the Payment Systems (Regulation) Act 1998) from having to include specified classes of transactions in reports prepared and lodged in relation to item 9 in the table included in section 396-55 of Schedule 1 to the TAA 1953.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms. It provides exemptions from reporting requirements which are considered to be minor in nature.
Conclusion
This legislative Instrument does not raise any human rights issues.