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Records are cool

Records are cool

Well, vinyl records are. Income tax records on the other hand… Tim Lynch and Michael Baartz discuss how companies must retain and, when required, provide access to electronic income tax records to the ATO.


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The exponential increase in how we use technology has meant that we create ‘records’ at a much greater volume. Being able to readily access these records remains of great importance – not only for operational purposes, but to ensure that relevant statutory requirements are being met.

Further, where taxpayer engagement with revenue authorities is only increasing, the ability to quickly and efficiently provide records and respond to Requests for Information is obviously of significant value.

The Australian Taxation Office (ATO) has released Taxation Ruling (TR) 2018/2 Income tax: record keeping and access - electronic records. While this ruling does not change the Commissioner’s existing views (and essentially compiles previous public advice/guidance), it is a timely reminder to reflect on existing record keeping practices.

Broadly, TR 2018/2 sets out four key factors:

  • records must not be altered or manipulated, and must be stored in a way that restricts the information from being altered or manipulated
  • generally, they must be retained for 5 years after the records are prepared or obtained, or the transactions are completed, whichever occurs later (albeit, while not included in the ruling, there may be specific additional record retention periods, for example, where capital gains tax (CGT) assets are involved)
  • they must be capable of being retrieved and read by the ATO when required and
  • they must be in English, or in a form that can easily be converted to English.

In light of TR 2018/2, it is worthwhile reviewing existing document management policies and practices, to ensure that these align with relevant ATO requirements (and other statutory requirements as required). Tax Risk Management Policy documentation should also cover off on document retention and record keeping policies.

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