LI 2022/D27 - Explanatory statement

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Taxation Administration Act 1953

Draft Explanatory Statement

General outline of instrument

1. This instrument is made under subsection 396-55(a)(ii) of Schedule 1 to the Taxation Administration Act 1953 (TAA).

2. Under table item 15 in section 396-55 in Schedule 1 to the TAA, operators of electronic distribution platforms (as defined by that table item) will be required to report information about certain transactions made through their platforms to the Australian Taxation Office (ATO).

3. This instrument substitutes the default annual reporting period with an alternate six-monthly reporting period. The reporting periods will be from 1 January to 30 June, and 1 July to 31 December, in each calendar year.

4. This instrument is a legislative instrument for the purposes of the Legislation Act 2003.

5. 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

6. This instrument commences on the day after it is registered on the Federal Register of Legislation. It has effect from different dates, depending on the type of transaction. It applies to transactions entered into on or after:

(a)

1 July 2023, for transactions that relate to a supply of taxi travel (within the meaning of the GST Act)

(b)

1 July 2023, for transactions that relate to a supply of short-term accommodation, and

(c)

1 July 2024, for all other transactions to be reported under item 15 of the table in section 396-55 of Schedule 1 to the TAA.

Operation of instrument

7. Item 15 of the table in section 396-55 of Schedule 1 to the TAA requires an operator of an electronic distribution platform (within the meaning of the A New Tax System (Goods and Services) Tax Act 1999 (GST Act), but disregarding paragraph 84-70(1)(c) of that Act) to report certain transactions. Reporting is required where consideration (within the meaning of the GST Act) is provided by an entity to another entity (the supplier) wholly or partly for a supply made by the supplier through the electronic distribution platform.

8. Paragraph 396-55(a)(ii) of Schedule 1 to the TAA allows the Commissioner to specify, by legislative instrument, an alternate period in relation to which a report must be prepared (the reporting period).

9. This legislative instrument amends the reporting period to require reporting every six months. The six-month periods are from 1 January to 30 June, and from 1 July to 31 December, each year.

10. This instrument does not change the lodgment deadlines for the report. Under paragraph 396-55(b)(i) of Schedule 1 to the TAA the report must be given to the Commissioner on or before the 31st day after the end of each reporting period.

11. This instrument does not affect any other reporting requirements that reporting entities may have under section 396-55 of Schedule 1 to the TAA.

Context of instrument

12. Six-monthly reporting of sharing economy data ensures that the ATO can support participants in the sharing economy more effectively to pay the correct amount of tax on any income they earn.

13. The ATO can better support taxpayers in meeting their tax obligations when data is received prior to the lodgment of income tax returns and activity statements. This enables early engagement and education strategies to make it easier for taxpayers to get things right and promote behavioural change.

14. Early engagement is important for the sharing economy as some participants may not be fully aware of their tax obligations.

15. More frequent reporting will also enable the ATO to more effectively identify and consider strategies to address deliberate non-compliance and ensure a level playing field for all sharing economy participants.

16. Six-monthly reporting also appropriately balances the need for, and benefits of, more regular reporting with a minor increase in the reporting burden imposed on electronic distribution platform operators.

17. The ATO will consult with electronic distribution platform operators to inform the design and implementation of supporting administrative processes, to minimise any additional compliance costs arising from the increased reporting frequency. The ATO will also assist platform operators to meet their reporting obligations throughout implementation.

18. Further, reducing the time lag between transactions occurring and the receipt of data enables the ATO to more effectively work with platform operators to improve their data collection, validation and reporting practices, increasing efficiency over time.

19. This also aligns data reporting frequency under the regime with reporting requirements under existing ATO data collection arrangements for the sharing economy.

Compliance effect of instrument

20. To be advised.

Consultation

21. Subsection 17(1) of the Legislation Act 2003 requires the Commissioner to be satisfied that appropriate and reasonably practicable consultation has been undertaken before he makes a determination.

22. As part of the consultation process, you are invited to comment on the draft determination and its accompanying draft explanatory statement.

Please forward your comments to the email address below by the due date.

Statement of Compatibility with Human Rights

This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Taxation Administration (Reporting by Electronic Distribution Platform Operators) Legislative Instrument 2022

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

Under table item 15 in section 396-55 in Schedule 1 to the Taxation Administration Act 1953, operators of electronic distribution platforms (as defined by that table item) will be required to report information about certain transactions made through their platforms to the Australian Taxation Office (ATO).

This instrument substitutes the default annual reporting period with an alternate six-monthly reporting period. The reporting periods will be from 1 January to 30 June, and 1 July to 31 December. Each report is required to be given to the ATO within 31 days of the end of each reporting period.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms. It only operates to increase the reporting frequency of information required, with a move from annual to bi-annual reporting. The increased reporting frequency will better enable the ATO able to assist taxpayers in meeting their tax obligations while ensuring a level playing field.

Conclusion

This legislative instrument does not raise any human rights issues.

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Draft published 19 December 2022

Ben Kelly
Deputy Commissioner of Taxation
Policy, Analysis and Legislation
Law Design and Practice

LI 2022/D27 - Legislative Instrument

Legislative References:
Acts Interpretation Act 1901
The Act

A New Tax System (Goods and Services Tax) Act 1999
The Act

Human Rights (Parliamentary Scrutiny) Act 2011
The Act

Legislation Act 2003
The Act

Taxation Administration Act 1953
The Act