You must support your assessment of or exemption from FIF taxation with records. The record keeping outlined in this chapter is a statutory requirement and there are prosecution provisions which may apply if you do not maintain the appropriate records.
You should also maintain attribution account records. For more information, read Chapter 6: Avoiding double taxation. If you do not keep these records, you will not be able to take advantage of:
- the exemption of distributions paid out of profits which were previously attributed to you [section 23AK] - see Exemption of distributions in chapter 6 for more information
- a reduction of the amount to include in your assessable income after the disposal of a FIF interest [section 613] - see Reduction of disposal consideration if FIF attributed income is not distributed in chapter 6
- the adjustments for FIF losses that have been used to reduce other assessable income [sections 532, 533 and 607] - see FIF attribution debit for amount of loss used to reduce assessable income in chapter 6.
Generally, you must keep records for five years after you prepared or obtained them, or after you completed the transactions or acts to which those records relate, whichever is the later. [section 262A]
The period in which the Commissioner may amend an assessment may be extended by an order of the Federal Court of Australia or with your consent. Where this occurs, you must keep your records for five years or to the end of the period during which the assessment may be amended, whichever is later. [section 170 and subsection 262A(4)]
You do not need to keep records where the Commissioner has notified you that retention of records is not required or if your company has gone into liquidation and finally dissolved. [subsection 262A(5)]
You must keep records in the English language or, if not in written form - for example, on magnetic tape or computer disk - in a form which can be readily accessed and translated into writing in English.
You must also keep records to allow your liability to tax to be readily worked out. [section 622]