Classes of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017

Administered by Department of the Treasury

Legislation au F2017L00629 Not in force Legislative Instrument

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Explanatory StatementClasses of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017

 

 

General Outline of Instrument

 

  1. This instrument is made under subsection 396-70(4) of Schedule 1 to the Taxation Administration Act 1953 (TAA).
  2. 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. 
  3. 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.
  4. 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an entity, and the administrator reasonably believes that the transaction was a payment to the entity, a refund or cash withdrawn by a customer of the entity, and is for the purpose of a business carried on by the entity.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.

 

Overview

The Explanatory Statement for the Classes of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017 outlines a legislative instrument made under the Taxation Administration Act 1953 (TAA). This instrument, which commenced on 1 July 2017, was designed to exempt certain classes of electronic payment system transactions from being reported in third party reports. The instrument was made by the Australian Taxation Office (ATO) and serves to reduce the administrative burden on administrators of payment systems by exempting them from reporting specified transactions. This was achieved through repealing and replacing a previous instrument, F2016L00527, and includes exemptions for authorised deposit-taking institutions, payments processed by Framework Participants under the High Value Clearing System, and various other categories of payments to service providers, utilities, government entities, insurers, and superannuation funds. The instrument was developed following consultations with key stakeholders and the public, and while some concerns were raised during the consultation period, not all could be accommodated due to policy intent or administrative feasibility. The instrument is compatible with human rights as it does not engage any of the applicable rights or freedoms and provides exemptions considered to be minor in nature.

Scope and Application

The "Classes of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017" pertains to the exemption of certain classes of electronic payment system transactions from being reported in third-party reports under the Taxation Administration Act 1953. This instrument applies to administrators of payment systems, as defined by the Payment Systems (Regulation) Act 1998, who are otherwise required to report transactions involving electronic payments facilitated on behalf of entities. The exemptions cover specific types of transactions, including payments initiated by authorised deposit-taking institutions, payments processed by Framework Participants under the High Value Clearing System, and payments made to various service providers such as carriage service providers, utilities, government entities, insurers, and superannuation funds. The instrument aims to provide clarity and potentially reduce the administrative burden on payment system administrators by exempting them from reporting these specified classes of transactions. It commenced on 1 July 2017, replacing the previous determination from 2016. The instrument is crafted to ensure minimal compliance costs for entities involved, aligning with the broader legislative intent of the Taxation Administration Act.

Key Provisions

The Explanatory Statement outlines the Classes of Electronic Payment System Transactions Exempt From Being Reported In Third Party Reports Determination 2017 (the Determination). This Determination, made under the Taxation Administration Act 1953 (TAA), exempts certain classes of electronic payment system transactions from being reported by administrators of payment systems in third party reports. Specifically, section 5(a) exempts authorised deposit-taking institutions from reporting transactions initiated by other entities that are already required to report those transactions to the Commissioner. Section 5(b) exempts administrators of a payment system from reporting payments processed by Framework Participants under the High Value Clearing System governed by the Australian Payments Clearing Association Limited. Section 5(c) exempts several categories of payments from reporting requirements, including payments to carriage service providers, utilities, government-related entities, insurers, and superannuation funds. If reporting these exempted transactions would impose an administrative burden, administrators may choose to report them despite the exemption. The Determination imposes obligations on administrators of payment systems to identify and exclude the specified classes of transactions from their third party reports. These obligations are intended to reduce compliance costs and administrative burdens for entities affected by the third party reporting legislation. The Determination also provides flexibility, allowing administrators to report exempted transactions if doing so would not significantly increase their administrative burden. The exemptions are designed to streamline reporting processes and provide clarity to administrators regarding which transactions need to be reported. Breaching the requirements of the Determination could potentially result in administrative consequences for administrators of payment systems. Although the Determination itself does not explicitly outline penalties for non-compliance, failure to comply with reporting obligations under the TAA could result in penalties as prescribed under that Act. The TAA may impose fines or other penalties for non-compliance, depending on the nature and severity of the breach. However, it is important to note that the Determination does not introduce new offences or penalties on its own; it operates within the framework established by the TAA. In summary, the Determination exempts certain classes of electronic payment system transactions from reporting requirements under the TAA, aiming to reduce administrative burdens and provide clarity to administrators. It imposes specific obligations on administrators to identify and exclude exempted transactions from their reports, with flexibility to report these transactions if necessary. While the Determination itself does not introduce new penalties, non-compliance with the underlying reporting obligations under the TAA may result in penalties as prescribed by that Act.

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Area of Law
Taxation Law
Instrument
Legislative Instrument
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Definitions & Interpretation
Reporting & Disclosure Obligations
Exemptions & Exclusions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.