A New Tax System (Tax Administration) Act 1999 (179 of 1999)
Schedule 4 Payment, ABN and identification verification system
Part 1 Amendment of the Taxation Administration Act 1953
1 At the end of Schedule 1
Add:
[The next Division is Division 400]
Part 5-30 - Payment, ABN and identification verification system
Division 400 - Guide to Part 5-30
400-1 What Part 5-30 is about
To improve compliance with the tax laws that relate to payments for certain supplies, this Part imposes additional requirements on purchasers and suppliers.
The additional requirements relate to verification of ABNs and to reporting information about payments.
Regulations will specify the supplies that are covered and the additional requirements that apply to payments for those supplies.
400-5 The payment, ABN and identification verification system
(1) There are 4 components in the payment, ABN and identification verification system:
(a) transaction reporting by purchasers (Division 405);
(b) transaction reporting by suppliers (Division 410);
(c) verification of suppliers' *ABNs by purchasers (Division 415);
(d) verification of suppliers' identities by purchasers (Division 417);
One or more of the components may apply to a particular payment. The regulations will specify which components apply.
(2) Where a component of the system applies to a payment, the requirements of that component must be complied with.
Division 405 - Transaction reporting by purchasers
Table of sections
405-5 Payments to which this Division applies
405-10 Reporting requirements
405-15 Invoices produced by purchasers
405-5 Payments to which this Division applies
(1) This Division applies to any payments made, or liable to be made, for a *supply where the supply is specified in regulations made for the purpose of this section.
(2) A payment is liable to be made if the obligation to make the payment is notified in an *invoice.
(3) Payments to which this Division applies are called Division 405 payments .
(4) Without limiting the ways in which the regulations may specify a *supply, the regulations may specify a supply by reference to:
(a) the goods or services supplied; or
(b) the supplier; or
(c) the purchaser.
405-10 Reporting requirements
(1) Any entity (the purchaser ) that makes, or is liable to make, a *Division 405 payment during a *quarter must give a *Division 405 report to the Commissioner within 21 days after the end of the quarter.
(2) A Division 405 report is a written statement in the *approved form that names the purchaser and, for each supplier in relation to whom the purchaser made, or was liable to make, a *Division 405 payment during the *quarter:
(a) names the supplier; and
(b) specifies the supplier's *ABN (if known by the purchaser); and
(c) specifies the total of the Division 405 payments that the purchaser made, or was liable to make, to the supplier during the quarter that:
(i) were notified in an invoice during the quarter (unless the payment was reported in an earlier Division 405 report); or
(ii) were made during the quarter but for which no invoice had been received before the end of the quarter.
The report must also include any other information that the Commissioner requires.
(3) The Commissioner may, in writing, require particular information to be included in a *Division 405 report or a class of Division 405 reports.
(4) The Commissioner may, by written notice, vary any requirements under subsection (1), (2) or (3) in relation to a purchaser or class of purchaser. The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.
405-15 Invoices produced by purchasers
If a purchaser produces an *invoice that notifies the purchaser's obligation to make a payment, the purchaser is taken to have been notified of the payment at the time that the invoice is produced.
Division 410 - Transaction reporting by suppliers
Table of sections
410-5 Payments to which this Division applies
410-10 Reporting requirements
410-15 Invoices produced by purchasers
410-5 Payments to which this Division applies
(1) This Division applies to any payments received, or entitled to be received, for a *supply where the supply is specified in regulations made for the purpose of this section.
(2) A payment is entitled to be received if the obligation to make the payment is notified in an *invoice.
(3) Payments to which this Division applies are called Division 410 payments .
(4) Without limiting the ways in which the regulations may specify a *supply, the regulations may specify a supply by reference to:
(a) the goods or services supplied; or
(b) the supplier; or
(c) the purchaser.
410-10 Reporting requirements
(1) Any entity (the supplier ) that receives, or is entitled to receive, a *Division 410 payment during a *quarter must give a *Division 410 report to the Commissioner within 21 days after the end of the quarter.
(2) A Division 410 report is a written statement in the *approved form that names the supplier and, for each purchaser in relation to whom the supplier received, or was entitled to receive, a *Division 410 payment during the *quarter:
(a) names the purchaser; and
(b) specifies the purchaser's *ABN (if known by the supplier); and
(c) specifies the total of the Division 410 payments that the supplier received, or was entitled to receive, from the purchaser during the quarter that:
(i) were notified in an invoice during the quarter (unless the payment was reported in an earlier Division 410 report); or
(ii) were received during the quarter but for which no invoice had been provided before the end of the quarter.
The report must also include any other information that the Commissioner requires.
(3) The Commissioner may, in writing, require particular information to be included in a *Division 410 report or a class of Division 410 reports.
(4) The Commissioner may, by written notice, vary any requirements under subsection (1), (2) or (3) in relation to a supplier or class of supplier. The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.
410-15 Invoices produced by purchasers
If a purchaser produces an *invoice that notifies the purchaser's obligation to make a payment, the supplier is taken to have notified the purchaser of the payment at the time that the invoice is produced.
Division 415 - Verification of suppliers' ABNs by purchasers
Table of sections
415-5 Payments to which this Division applies
415-10 ABN verification requirements
415-15 Method of obtaining ABN verification
415-20 Verification applies to later payments
415-5 Payments to which this Division applies
(1) This Division applies if:
(a) a payment is made, or is liable to be made, by an entity (the purchaser ) to another entity (the supplier ) for a *supply; and
(b) the supply is specified in regulations made for the purpose of this section; and
(c) the supplier has purported to *quote his or her *ABN to the purchaser.
(2) Payments to which this Division applies are called Division 415 payments .
(3) Without limiting the ways in which the regulations may specify a *supply, the regulations may specify a supply by reference to:
(a) the goods or services supplied; or
(b) the supplier; or
(c) the purchaser.
415-10 ABN verification requirements
Before the purchaser makes a *Division 415 payment to the supplier, the purchaser must obtain verification that the *ABN *quoted by the supplier is the ABN entered in the *Australian Business Register with the name given by the supplier.
Note: If the purchaser has reasonable grounds to believe that the supplier has not correctly quoted his or her ABN, the purchaser is required to withhold an amount under section 12-190.
415-15 Method of obtaining ABN verification
(1) To obtain verification of a supplier's *ABN, a purchaser must seek the verification in a manner approved in writing by the Commissioner.
(2) Without limiting the Commissioner's power under subsection (1), the Commissioner may approve verifications being sought orally or by way of electronic transmission.
(3) Verification of an *ABN may be obtained in such form, including orally or by way of electronic transmission, as the Commissioner approves in writing.
(4) The Commissioner may, by written notice, vary any requirements under subsection (1) in relation to:
(a) a purchaser or class of purchaser; or
(b) a supplier or class of supplier.
The Commissioner may do so in such instances and to such extent as the Commissioner thinks fit.
415-20 Verification applies to later payments
(1) Verification of a supplier's ABN applies to all later *Division 415 payments by the purchaser to the supplier unless there is a period of 2 years during which no *Division 415 payment is made by the purchaser to the supplier. If this occurs, the verification continues to apply to any purchases before 1 July first occurring after the end of the 2 year period.
(2) However, verification of a supplier's *ABN does not apply to a *Division 415 payment if the purchaser has reasonable grounds to believe that the *ABN *quoted by the supplier is no longer the ABN entered in the *Australian Business Register with the name given by the supplier.
Division 417 - Verification of suppliers' identities by purchasers
Table of sections
417-5 Payments to which this Division applies
417-10 Identity verification requirements
417-15 Method of obtaining identity verification
417-20 Verification applies to later payments
417-5 Payments to which this Division applies
(1) This Division applies if:
(a) a payment is made, or liable to be made, by an entity (the purchaser ) to another entity (the supplier ) for a *supply; and
(b) the supply is specified in regulations made for the purpose of this section.
(2) Payments to which this Division applies are called Division 417 payments .
(3) Without limiting the ways in which the regulations may specify a *supply, the regulations may specify a supply by reference to:
(a) the goods or services supplied; or
(b) the supplier; or
(c) the purchaser.
417-10 Identity verification requirements
Before the purchaser makes a *Division 417 payment, the purchaser must obtain verification of the supplier's identity.
Note: If the purchaser has reasonable grounds to believe that the supplier has not correctly quoted his or her ABN, the purchaser is required to withhold an amount under section 12-190.
417-15 Method of obtaining identity verification
(1) To obtain verification of a supplier's identity, a purchaser must carry out the identity verification procedure that is determined, in writing, by the Commissioner.
(2) The Commissioner may determine different identity verification procedures for:
(a) different purchasers or classes of purchasers; or
(b) different suppliers or classes of suppliers.
417-20 Verification applies to later payments
(1) Verification of a supplier's identity applies to all later *Division 417 payments by the purchaser to the supplier unless there is a period of 2 years during which no *Division 417 payment is made by the purchaser to the supplier. If this occurs, the verification continues to apply to any purchases before 1 July first occurring after the end of the 2 year period.
(2) However, verification of a supplier's identity does not apply to a later *Division 417 payment if the purchaser has reasonable grounds to believe that the verified identity is not the supplier's true identity.
Division 420 - Penalties for not reporting or verifying
Table of sections
420-5 Failing to report: civil penalty
420-5 Failing to report or verify: civil penalty
An entity that fails to:
(a) give a *Division 405 report to the Commissioner as required by section 405-10; or
(b) give a *Division 410 report to the Commissioner as required by section 410-10; or
(c) verify a supplier's *ABN as required by section 415-10; or
(d) verify a supplier's identity as required by section 417-10;
is liable to pay to the Commissioner a penalty of 20 penalty units.
Note 1: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Note 2: Division 298 contains machinery provisions for civil penalties.
Division 425 - Other matters
Table of sections
425-20 Constructive payment
425-25 Non-cash benefits
425-30 Amounts to be expressed in Australian currency
425-20 Constructive payment
(1) In working out whether an entity has paid an amount to another entity, and when the payment is made, the amount is taken to have been paid to the other entity when the first entity applies or deals with the amount in any way on the other's behalf or as the other directs.
(2) An amount is taken to be payable by an entity to another entity if the first entity is required to apply or deal with it in any way on the other's behalf or as the other directs.
425-25 Non-cash benefits
For the purposes of this Part, if an entity (the payer ) provides a *non-cash benefit to another entity (the recipient ), the payer is taken to have made a payment of an amount equal to the *market value of the benefit provided.
425-30 Amounts to be expressed in Australian currency
If this Part requires a payment made in foreign currency to be reported, the payment:
(a) is to be expressed in Australian currency; and
(b) is to be worked out on the basis of the exchange rate applicable when the amount is paid.