Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subject to this section, a person carrying on a business must keep records that record and explain all transactions and other acts engaged in by the person that are relevant for any purpose of this Act.
Note: There is an administrative penalty if you do not keep or retain records as required by this section: see section 288 - 25 in Schedule 1 to the Taxation Administration Act 1953 .
(1A) Without limiting subsection (1), if the person is an OBU (within the meaning of Division 9A of Part III), the person must, subject to this section, maintain the same accounting records in respect of, and separately account for, money used in its OB activities (within the meaning of that Division) as it would if it were a bank conducting banking activities with another person.
(1AA) Subsection (1A) does not require an OBU to maintain a separate nostro account or vostro account for its OBU activities. Nostro accounts and vostro accounts are accounts held or maintained by the OBU for the sole purpose of settling international transactions.
Note: A defendant bears an evidential burden in relation to the matters in subsection (1AA), see subsection 13.3(3) of the Criminal Code .
(1B) Without limiting subsection (1), a foreign bank must maintain accounting records in respect of, and separately account for, money used in the activities of a permanent establishment in Australia through which the bank carries on banking business.
(1BA) Without limiting subsection (1), a foreign entity (as defined in the Income Tax Assessment Act 1997 ) that is a financial entity (as defined in that Act) must maintain accounting records in respect of, and separately account for, money used in the activities of a permanent establishment in Australia of the entity.
(1C) Without limiting subsection (1), if a trust is taken to be 2 separate trusts under section 50 - 80 of the Income Tax Assessment Act 1997 , the trustee must maintain accounting records in respect of, and separately account for, those 2 trusts.
(1D) A taxpayer who is a full self - assessment taxpayer must:
(a) keep a record containing particulars of the basis of the calculation of the amounts that the taxpayer specified under section 161AA in a return for a year of income; and
(b) produce to the Commissioner, when and as required by the Commissioner under this Act, a document containing those particulars.
(2) The records to be kept under subsection (1) include:
(a) any documents that are relevant for the purpose of ascertaining the person's income and expenditure; and
(b) documents containing particulars of any election, choice, estimate, determination or calculation made by the person under this Act and, in the case of an estimate, determination or calculation, particulars showing the basis on which and method by which the estimate, determination or calculation was made.
(2AAA) Subsection (1) applies to a participant in a forestry managed investment scheme in relation to the scheme even if the participant is not carrying on a business in relation to the scheme.
(2AAB) Subsection (2AAC) applies to the forestry manager of a forestry managed investment scheme if:
(a) the forestry manager (or an associate of the forestry manager) receives an amount under the scheme; and
(b) the amount is included in the forestry manager's (or the associate's) assessable income under section 15 - 46 of the Income Tax Assessment Act 1997 .
(2AAC) The records to be kept under subsection (1) by the forestry manager include records about the basis on which the scheme satisfies the requirement in paragraph 394 - 10(1)(c) of the Income Tax Assessment Act 1997 (the 70% DFE rule).
(2AAD) Subsection (1) applies to a person who has a Division 230 financial arrangement even if the person is not carrying on a business in relation to the arrangement. However, that subsection only requires the person to keep records that, for the purposes of this Act, are relevant to the arrangement.
(2AAE) To avoid doubt, for the purposes of subsection (4), if the records mentioned in that subsection relate to a Division 230 financial arrangement that a person has, the transactions or acts mentioned in that subsection are taken to be completed at:
(a) the end of the year of income in which the person ceases to have the arrangement; or
(b) if:
(i) the person applies the hedging financial arrangement method in Subdivision 230 - E of the Income Tax Assessment Act 1997 to determine the amount of one or more gains or losses the person makes from the arrangement; and
(ii) determining the way in which those gains or losses are dealt with in accordance with subsection 230 - 310(4) of that Act is possible only at a time after the end of the income year mentioned in paragraph (a);
the end of the year of income in which that time occurs.
(2AA) The records to be kept under subsection (1) include records required to be kept for the purposes of section 820 - 960, 820 - 980 or 820 - 985 of the Income Tax Assessment Act 1997 .
(2A) If an entity is required to withhold an amount under Division 12 in Schedule 1 to the Taxation Administration Act 1953 , or to pay an amount to the Commissioner under Division 13 or 14 of that Schedule, the entity must keep records that record and explain all transactions and other acts engaged in by the entity that are relevant for the purposes of that Schedule.
(3) A person who is required by this section to keep records must:
(a) keep the records in writing in the English language or so as to enable the records to be readily accessible and convertible into writing in the English language; and
(b) keep the records so as to enable the person's liability under this Act to be readily ascertained; and
(c) for records required to be kept under section 820 - 960 of the Income Tax Assessment Act 1997 --comply with the applicable provisions of that section; and
(ca) for records required to be kept under section 230 - 355 of the Income Tax Assessment Act 1997 --comply with the applicable provisions of that section; and
(d) for records required to be kept under section 820 - 980 of that Act--comply with subsections (2) and (3) of that section; and
(e) for records required to be kept under section 820 - 985 of that Act--comply with subsections (2) and (3) of that section.
(4) A person who has possession of any records kept or obtained under or for the purposes of this Act must retain those records until:
(a) in a case to which paragraph (b) does not apply--the end of 5 years after those records were prepared or obtained, or the completion of the transactions or acts to which those records relate, whichever is the later; or
(b) if the period (in this paragraph called the assessment period ) within which the Commissioner may, under section 170, amend an assessment in respect of the person's income of the year of income to which those records relate, or in which a transaction or act to which those records relate was completed, is extended under subsection 170(7):
(i) the end of the period of 5 years referred to in paragraph (a); or
(ii) the end of the assessment period as so extended;
whichever is the later.
(4AAA) Subsection (4) does not apply to any record required to be kept by a provision in Schedule 1 to the Taxation Administration Act 1953 .
Note: A defendant bears an evidential burden in relation to the matters in subsection (4AAA), see subsection 13.3(3) of the Criminal Code .
(4A) A person who makes an election under subsection 371(8) must retain the election until the end of 5 years after the election was made.
(4AA) A person who is a party to a joint election for roll - over relief made under former section 59AA, 122R, 123F, 124AO or 124W must retain the election, or a copy, until the end of 5 years after the earlier of:
(a) the disposal by the person of the property; or
(b) the loss or destruction of the property.
(4ACA) Subsection (4AC) does not apply in relation to a disposal of property:
(a) to which former subsection 58(1), 122JAA(1), 122JG(1), 123BBA(1), 123BF(1), 124AMAA(1), 124GA(1) or 124JD(1) applies; and
(b) that occurs in the 1997 - 98 year of income or a later year of income.
Note: A defendant bears an evidential burden in relation to the matters in subsection (4ACA), see subsection 13.3(3) of the Criminal Code .
(4AC) If former subsection 58(1), subsection 73AA(1), or former subsection 122JAA(1), 122JG(1), 123BBA(1), 123BF(1), 124AMAA(1), 124GA(1), 124JD(1) or 124PA(1) applies to the disposal of property by the transferor referred to in that subsection to the transferee referred to in that subsection:
(a) the transferor must give to the transferee, within the period specified in subsection (4AD), a notice containing such information about the transferor's holding of the property as will enable the transferee to work out how former section 58, section 73AA, or former section 122JAA, 122JG, 123BBA, 123BF, 124AMAA, 124GA, 124JD or 124PA, as the case may be, will apply to the transferee's holding of the property; and
(b) the transferee must retain the notice, or a copy, until the end of 5 years after the earlier of:
(i) the disposal by the person of the property; or
(ii) the loss or destruction of the property.
(4AD) The notice referred to in subsection (4AC) must be given within 6 months after the later of the following:
(a) the end of the year of income of the transferee in which the disposal occurred;
(b) the commencement of subsection (4AC);
or within such further period as the Commissioner allows.
(4AE) A person who made an election under former paragraph 54A(1)(a) in relation to a unit of property must retain the election, or a copy, until the end of 5 years after the earlier of:
(a) the disposal by the person of the property; or
(b) the loss or destruction of the property.
(4AF) If:
(a) a person (the transferor ) disposes of, or of a lease of, any part of a building within the meaning of former Division 10C of Part III to another person (the transferee ); and
(b) either:
(i) one or more deductions have been allowed to the transferor under former subsection 124ZC(2A) or (4A) in respect of qualifying hotel expenditure or qualifying apartment expenditure in respect of the building; or
(ii) if there have been one or more prior successive owners or lessees of the building--one or more deductions have been allowed to any of the prior successive owners or lessees under former subsection 124ZC(2A) or (4A) in respect of qualifying hotel expenditure or qualifying apartment expenditure in respect of the building;
then:
(c) the transferor must give to the transferee, within the period specified in subsection (4AG), a notice containing such information about the transferor's holding or lease of the building as will enable the transferee to work out how former Division 10C of Part III applies to the transferee's holding or lease of the building; and
(d) the transferee must retain the notice, or a copy, until the end of 5 years after the earlier of:
(i) the transferee ceasing to be the owner or lessee of the part of the building; or
(ii) the destruction of the building.
(4AG) The notice referred to in subsection (4AF) must be given within 6 months after the later of the following:
(a) the end of the year of income of the transferee in which the disposal occurred;
(b) the commencement of subsection (4AF);
or within such further period as the Commissioner allows.
(4AH) If:
(a) a person (the transferor ) disposes of, or of a lease of, any part of a building within the meaning of former Division 10D of Part III to another person (the transferee ); and
(b) either:
(i) one or more deductions have been allowed to the transferor under former subsection 124ZH(2A) in respect of qualifying expenditure in respect of the building; or
(ii) if there have been one or more prior successive owners or lessees of the building--one or more deductions have been allowed to any of the prior successive owners or lessees under former subsection 124ZH(2A) in respect of qualifying expenditure in respect of the building;
then:
(c) the transferor must give to the transferee, within the period specified in subsection (4AJ), a notice containing such information about the transferor's holding or lease of the building as will enable the transferee to work out how former Division 10D of Part III applies to the transferee's holding or lease of the building; and
(d) the transferee must retain the notice, or a copy, until the end of 5 years after the earlier of:
(i) the transferee ceasing to be the owner or lessee of the part of the building; or
(ii) the destruction of the building.
(4AJ) The notice referred to in subsection (4AH) must be given within 6 months after the later of the following:
(a) the end of the year of income of the transferee in which the disposal occurred;
(b) the commencement of subsection (4AH);
or within such further period as the Commissioner allows.
(4AJA) If:
(a) a person (the transferor ) disposes of capital works within the meaning of Division 43 of the Income Tax Assessment Act 1997 , being capital works begun after 26 February 1992, to another person (the transferee ); and
(b) a deduction has been allowed under former Division 10C or 10D of Part III of this Act, or under Division 43 of the Income Tax Assessment Act 1997 , in respect of those capital works;
then:
(c) the transferor must give the transferee, within 6 months after the end of the year of income in which the disposal occurred or within a further period allowed by the Commissioner, a notice containing such information as will allow the transferee to work out how Division 43 of the Income Tax Assessment Act 1997 will apply to the transferee in respect of the capital works; and
(d) the transferee must retain the notice or a copy of it until the end of 5 years after the transferee disposes of the capital works or the capital works are destroyed, whichever is the earlier.
(4AL) A person who makes an election in accordance with subitem 22(3), 22A(3), 23(3) or 23A(2) of the Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998 must retain the election until the end of 5 years after the election was made.
(5) Nothing in this section requires a person to retain records or an election where:
(a) the Commissioner has notified the person that retention of the records or election is not required; or
(b) the person is a company that has gone into liquidation and finally ceased to exist.
Note: A defendant bears an evidential burden in relation to the matters in subsection (5), see subsection 13.3(3) of the Criminal Code .
(5A) An offence under this section is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
(6) In this section:
"associate" has the same meaning as in the Income Tax Assessment Act 1997 .
"foreign bank" means body corporate that is a foreign ADI (authorised deposit - taking institution) for the purposes of the Banking Act 1959 .
"forestry managed investment scheme" has the same meaning as in the Income Tax Assessment Act 1997 .
"forestry manager" of a forestry managed investment scheme has the same meaning as in the Income Tax Assessment Act 1997 .
"participant" in a forestry managed investment scheme has the same meaning as in the Income Tax Assessment Act 1997 .
Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.