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Are electronic records OK for tax?

They’re OK.

 

electronic paper-shredder

It’s clear on the ATO website that electronic storage of paper records is acceptable:

This article from Addisons explains the big picture:

  1. including in the context of record keeping obligations of companies under the Corporations Act 2001; and
  2. refers to the general requirement that taxpayers keep their (Commonwealth) tax related documents for five years.

ATO record keeping requirements in detail are in Practice Statement Law Administration PS LA 2005/2. PS LA 2005/2 shows that the period for keeping records referred to in the article can be longer than five years in certain cases. Records of documents going back to when an asset was acquired, even if prior to the introduction of capital gains tax in 1985, need to be kept for five years after the CGT asset is disposed of. It is also apparent under PS LA 2005/2 that the ATO can impose a range of penalties for failure to keep records including referring cases for criminal prosecution to the DPP where they perceive deliberate falsifications of records.

The article shows how ATO record keeping requirements reflect the Electronic Transactions Act (C’th) 1999. In essence, section 12 states that electronic records of paper documents required to be kept under Commonwealth law are OK if the electronic system is capable of conveniently and adequately reproducing the paper record. That section is referred to and is in line with Taxation Ruling TR 2005/9 Income tax: record keeping – electronic records.

Implementing electronic tax records

A taxpayer fails these requirements, and risks penalty, if electronic records are lost. Using a backup system is critical whatever electronic system is being used. Moreover electronic records have ease of duplication and filing advantages that make electronic records preferable to paper records.

There are other risks of loss of electronic records that should be borne in mind. Export to other formats from legacy or crippleware systems is an imperative when the records can no longer be retrieved from computer software say because the software becomes, over time, no longer licensed, no longer runs in the taxpayer’s operating system environment or the software itself has inherent restraints on its archiving capability. Many modern bookkeeping systems have easy to use export features which can be worthwhile using as a failsafe to ensure compliance with record keeping obligations.

Is a tax invoice that is only electronic OK?

The position with tax invoices is clear. In para 12 of Goods and Services Tax Ruling 2013/1 the ATO states:

Tax invoices in electronic form
  1. A document in electronic form that meets the requirements of subsection 29-70(1) (and if applicable, subsections 48-57(1) and 54-50(1)), will be in the approved form for a tax invoice. [Footnote 9 – This record must be in English or readily accessible and easily convertible to English as required by subsection 382-5(8) of Schedule 1 to the TAA 1953.]

Using Twitter in tax practice

David Garde presented to the Chartered Accountants Australia + New Zealand Tax Discussion Group No. 15 on “Using Twitter in tax practice” on 7 June 2016.

During and following the presentation David was asked how to get started on Twitter and are there Twitter users he can suggest for a new Twitter user in the tax space:

Getting started on Twitter

The 8 minute youtube video How to Use Twitter on Your iPhone, for Seniors is a helpful getting started step by step guide.

Twitter can also be easily set up from the Twitter website or even by selecting:

  1. the twitter  icons at this site to follow @TheTaxObjection;
  2. the similar icon/link at other sites; or
  3. any of the below links to Twitter users.

If you have not joined Twitter then you will be prompted/taken to join Twitter before you can the follow the Twitter user you try to follow.

Microblogging about tax

As mentioned in the presentation there is a huge amount of information microblogged on tax with an emphasis on tax comments on what Twitter users find interesting and worth tweeting about.

It is probably better to follow the feed of interesting users/conversations for a while before posting/making tweets until you are comfortable with the Twitter platform. Lots of Twitter users don’t post tweets at all and so just use Twitter as an information service in quiet moments conveniently on their phone. It’s easy to follow users, and to unfollow them if you don’t want to see them in your Twitter feed (timeline) any more.

Some users to follow who tweet about tax

Views about what is interesting are personal and vary with the type of tax work you do. Some Twitter users tax practitioners could follow are:

Australian tax

The TaxObjection – @TheTaxObjection  (of course!)

ATO – @ato_gov_au

taxchat (Diana Winfield, CCH) – @taxchat

GreenwoodsTax – @GreenwoodsTax

EY Tax – @EY_Tax

International tax

OECD tax – @OECDtax

Jesse Drucker (Bloomberg) – @JesseDrucker

Tax Justice Network – @taxjusticenet

Nick Shaxson – @nickshaxson

Richard Brooks – @rbrooks45

 Journalists

Michael West (former SMH) – @MichaelWestBiz

Michael Pascoe (SMH & The Age) – @MichaelPascoe01

Other

and, of course,

CharteredAcctsANZ – @Chartered_Accts

Following conversations

and you can join conversations too like

#austax

#capitalgainstax

#TDGNo15

Once set up why not tweet “#TDGNo15 I am on Twitter” so we can see it on the #TDGNo15 conversation?