GST errors that cannot be corrected on a later activity statement
You cannot correct a credit or debit error on a later activity statement if:
- the GST error relates to a subject matter of a compliance activity or was made in a reporting period that is subject to a compliance activity,
- you have corrected the GST error in another reporting period
- you have already lodged the later activity statement and would need to revise it to correct an error from an earlier reporting period.
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If you are subject to compliance activity
A compliance activity is an examination of your GST affairs undertaken by us and includes reviews, audits, verification checks, record-keeping reviews/audits and similar activities.
Once you receive advice (by phone or in writing) from us about our intention to conduct a compliance activity, you cannot correct a GST error that is the subject matter of a compliance activity or errors arising in a reporting period that is subject to the compliance activity. If you find such GST errors, it is in your best interest to voluntarily disclose them. If you tell us about your GST error, it will be taken into account when we consider the application of a penalty.
Example: GST errors cannot be corrected due to compliance activity
In June 2014, we notify Mike's Trading that we are conducting a review of his past property transactions. As a result, Mike undertakes his own review of his property transactions and discovers that he made a GST error treating a particular sale of property as taxable instead of input taxed. He also made GST errors claiming GST credits for purchases in relation to this sale. As these GST errors relate to a matter that is specified as being subject to compliance activity, Mike's Trading cannot correct these errors in a later activity statement.
End of example
Example: GST error can be corrected despite compliance activity
In March 2016 we notified Big Co that we are conducting a general review of its GST affairs for each of the monthly reporting periods ending 31 January 2015 to 28 February 2016. Big Co also conducts its own review and discovers a GST error made in working out its net amount for the December 2014 reporting period. As the GST error is made for a reporting period that is not subject to compliance activity, Big Co can correct the error in a later activity statement, if all other conditions are met.
End of example
A compliance activity is completed when you receive a notice of assessment or notice of amended assessment, or when we tell you that the examination has been finalised.
If you have corrected the GST error in another reporting period
You cannot correct a GST error more than once. For example, if you revise the earlier activity statement in which the GST error was made, or if you have already corrected the GST error in another reporting period, you cannot then correct the error on a later activity statement.
This includes the circumstance where you only partially correct a debit error because the relevant debit error value limit was exceeded. You cannot correct the amount that exceeded the debit error value limit on a subsequent activity statement.
Revising a lodged activity statement
You cannot revise an activity statement you've already lodged to correct a GST error from an earlier reporting period. You can only correct a GST error in an activity statement that you haven’t yet lodged.
For example, if you made an error in your October activity statement and have already lodged your February activity statement, you cannot revise the February activity statement to include the correcting information. You'll have to wait until you lodge your April activity statement to correct the error (if it meets the conditions of correcting a GST error).
Explains when businesses can correct GST errors in a later activity statement.