Explanatory Statement
Goods and Services Tax: Waiver of Adjustment Note Requirement (eftpos Interchange Services Reports) Determination 2021
General Outline of Determination
- This determination is made under subsection 29-20(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
- This determination allows a member to attribute a decreasing adjustment arising from an adjustment event in respect of an eftpos interchange service without holding an adjustment note in certain circumstances.
- This determination is a legislative instrument for the purposes of the Legislation Act 2003.
- 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.
Date of effect
5. This determination commences on the day after it is registered on the Federal Register of Legislation.
6. Under section 12(2) of the Legislation Act 2003, this determination does not adversely affect the rights or liabilities of any person other than the Commonwealth.
What is this determination about?
7. The basic attribution rules in subsection 29-20(3) of the GST Act generally require an entity to hold an adjustment note before being able to attribute the adjustment (or any part of the adjustment) to a tax period if the decreasing adjustment arises from an adjustment event.
8. Subsection 29-20(3) of the GST Act also provides that the requirement to hold an adjustment note does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for an adjustment note does not apply.
9. This determination specifies when there is no requirement to hold an adjustment note before being able to attribute a decreasing adjustment that relates to the acquisition of eftpos interchange services.
What is the effect of this determination?
10. The effect of this determination is that a member that satisfies the requirements in section 7 of this determination is not required to hold an adjustment note in order to attribute a decreasing adjustment relating to the acquisition of eftpos interchange services.
Compliance cost assessment
11. Compliance Cost Impact: Minor – there will be minimal impact for both implementation and ongoing compliance costs. The determination is minor or machinery in nature.
Background
12. This determination has been developed to reduce the compliance costs of members of the eftpos payment system.
Consultation
13. Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the Commissioner is satisfied that appropriate and reasonably practicable consultation has been undertaken.
14. For this instrument, public consultation was undertaken for a period of 4 weeks commencing on 5 March 2021.
15. The draft instrument and draft explanatory statement were published on the ATO Legal database. Publication was advertised via the ‘What’s new’ page on that system and via the ‘Open Consultation’ page on ato.gov.au. Major tax and superannuation publishers and associations monitor these pages and include the details in the daily and weekly Alerts and newsletters to their subscribers and members. This ensures advice of the draft is disseminated widely across the tax professional community, and that they are in an informed position to provide comments and feedback.
16. No feedback was received.
Legislative references
Acts Interpretation Act 1901
A New Tax System (Goods and Services) Tax Act 1999
Legislation Act 2003
Human Rights (Parliamentary Scrutiny) Act 2011
Statement of compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Goods and Services Tax: Waiver of Adjustment Note Requirement
(eftpos Interchange Services Reports) Determination 2021
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
The Commissioner determines under subsection 29-20(3) of the A New Tax System (Goods and Services Tax) Act 1999 that the requirement to hold an adjustment note does not apply in circumstances where a member holds an eftpos interchange services report that satisfies the requirements set out in section 8 of the determination.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms. It allows for a member to attribute a decreasing adjustment without holding an adjustment note in certain circumstances.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Goods and Services Tax: Waiver of Adjustment Note Requirement (eftpos Interchange Services Reports) Determination 2021 is a legislative instrument designed to amend the requirements of the A New Tax System (Goods and Services Tax) Act 1999, specifically concerning the holding of adjustment notes by members of the eftpos payment system. This determination was introduced to address the problem of high compliance costs associated with the acquisition of eftpos interchange services, particularly the requirement to hold an adjustment note to attribute a decreasing adjustment. Enacted by the Commissioner under the authority of the GST Act, the policy objective is to provide relief to members of the eftpos payment system by specifying circumstances where the holding of an adjustment note is not necessary, thereby streamlining the process and reducing administrative burdens. This legislative instrument is compatible with human rights, as it does not engage any of the applicable rights or freedoms and thus does not raise any human rights issues.
Scope and Application
The Goods and Services Tax: Waiver of Adjustment Note Requirement (eftpos Interchange Services Reports) Determination 2021 applies to members of the eftpos payment system, allowing them to attribute a decreasing adjustment arising from an adjustment event in respect of an eftpos interchange service without holding an adjustment note under certain circumstances. This legislative instrument is made under subsection 29-20(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and is intended to reduce compliance costs for members. The determination specifies that there is no requirement for a member to hold an adjustment note if they hold an eftpos interchange services report that meets the criteria set out in section 8 of the determination. The instrument applies on a national level and is effective from the day after its registration on the Federal Register of Legislation. Importantly, this determination does not adversely affect the rights or liabilities of any person other than the Commonwealth. There are no exclusions or exemptions outlined in the determination, and it does not extend or restrict application through subordinate instruments.
Key Provisions
The Goods and Services Tax: Waiver of Adjustment Note Requirement (eftpos Interchange Services Reports) Determination 2021 (the "Determination") is a legislative instrument made under subsection 29-20(3) of the A New Tax System (Goods and Services Tax) Act 1999 (the "GST Act"). The Determination aims to reduce the compliance costs for members of the eftpos payment system by allowing a member to attribute a decreasing adjustment arising from an adjustment event in respect of an eftpos interchange service without holding an adjustment note in certain circumstances (section 7). This applies when the member holds an eftpos interchange services report that satisfies the requirements set out in section 8 of the Determination.
Under the GST Act, a member generally needs to hold an adjustment note before attributing a decreasing adjustment to a tax period if the adjustment arises from an adjustment event (subsection 29-20(3)). However, the Determination waives this requirement if the member meets the conditions outlined in section 8, such as holding an eftpos interchange services report that includes sufficient information to attribute the adjustment. The Determination specifies the types of information that must be contained in the report, including details of the transaction, the amount of the adjustment, and the tax period to which the adjustment relates.
Members of the eftpos payment system who satisfy the requirements in section 7 of the Determination are not required to hold an adjustment note to attribute a decreasing adjustment relating to the acquisition of eftpos interchange services. This waiver of the adjustment note requirement is intended to simplify the compliance process for these members and reduce their administrative burden.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the Determination for failing to comply with its requirements. However, failure to comply with the GST Act generally may result in penalties and enforcement actions under that Act. For instance, under section 175-5 of the GST Act, a person who fails to comply with certain obligations may be liable for a penalty of up to $22,200 for each failure. Additionally, the Commissioner of Taxation has the authority to take enforcement action, including issuing fines and pursuing legal proceedings, for non-compliance with the GST Act.
The Determination is compatible with human rights as it does not engage any of the applicable rights or freedoms and does not raise any human rights issues. It was developed after appropriate and reasonably practicable consultation, as required by the Legislation Act 2003, although no feedback was received during the consultation period. The Determination commenced on the day after it was registered on the Federal Register of Legislation, and it does not adversely affect the rights or liabilities of any person other than the Commonwealth.