Explanatory StatementClasses of Electronic Payment System Transactions Exempt In Certain Years 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, in the 2017/18, 2018/19 and 2019/20 financial years, 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 included 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.
- The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Repeal of previous instrument
5. This instrument repeals and replaces Instrument F2016L00530 Classes of Electronic Payment System Transactions Exempt in the 2017/18 year from Providing Third Party Reports Determination 2016 registered on 15 April 2016.
Date of effect
6. The instrument commences on 1 July 2017 and expires on 30 June 2020.
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an entity, and the administrator reasonably believes that the transaction was a payment to the entity, a refund or cash withdrawn by a customer of the entity, and is for the purpose of a business carried on by the entity.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. Subsection 396-70(4) of Schedule 1 to the TAA allows the Commissioner, by legislative instrument, to exempt specified classes of transactions from being reported.
9. This instrument exempts certain transactions from these reporting requirements in the 2017/18, 2018/19 and 2019/20 financial years.
10. This instrument exempts administrators of a payment system, within the meaning of the Payment Systems (Regulation) Act 1998 from providing information to the Commissioner of Taxation under table item 9 in section 396-55 of Schedule 1 to the TAA in relation to the following transactions:
a) Direct Entry Direct Debit payments processed before 1 July 2018 through the Bulk Electronic Clearing System (BECS) governed by Australian Payments Clearing Association Limited;
b) Direct Entry Direct Credit payments processed before 1 July 2020 through the BECS; and
c) Payments processed before 1 July 2020 by a New Payments Platform Participant using the New Payments Platform (NPP) governed by NPP Australia Limited.
What is the compliance effect of this instrument
11. The Commissioner does not require the reporting of the preceding classes of transactions in the 2017/18 year due to the complexity of the BECS payment system. Industry implementation of the NPP does not commence until part way through the 2017/18 year. This will allow for reporters to transition their reporting obligations over time, reducing the compliance burden for the participants implementing the NPP in the first year of reporting.
12. The list of excluded transactions provides certainty and a potential reduction in compliance cost for entities that may be impacted by the third party reporting legislation. Reporting entities that have excluded transactions can omit that information from their reporting obligations.
13. 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
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 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 Administration Act 1901
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 IN CERTAIN YEARS 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, in the 2017/18 financial year, administrators and participants 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 to certain entities for a fixed period.
Conclusion
This legislative Instrument does not raise any human rights issues.