Activities involving electronic sales suppression tools (ESST) that relate to people or businesses that have Australian tax obligations are now legally banned from 4 October 2018. This follows the measures in the Treasury Laws Amendment (Black Economy Taskforce Measures No 1) Bill 2018 receiving Royal Assent on 3 October 2018.
The ATO position is that a person or entity may be liable for criminal and administrative penalties if they produce, supply, possess or use an ESST (or knowingly assist others to do so). The ATO noted that ESSTs can come in different forms and are constantly evolving. For example, an ESST can be:
- an external device connected to a point of sale (POS) system;
- additional software installed into otherwise-compliant software;
- a feature or modification, like a script or code, that is a part of a POS system or software.
An ESST may allow income to be misrepresented and under-reported by:
- deleting transactions from electronic record-keeping systems;
- changing transactions to reduce the amount of a sale;
- misrepresenting a sales record, for example by allowing GST taxable sales to be re-categorised as GST non-taxable sales;
- falsifying POS records.
It is now an offence to produce or supply an ESST, possess an ESST or incorrectly keep records using an ESST. A Court may impose a criminal penalty up to a maximum of 5,000 penalty units. Otherwise, the ATO may impose an administrative penalty of 60 penalty units.
Source: Thomson Reuters GST News Alert
For further information please contact our office.
Date of Issue: 8 October 2018
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