From 4 October 2018, the Government has banned activities involving electronic sales suppression tools (‘ESSTs’) that relate to people or businesses that have Australian tax obligations.
The production, supply, possession or use of an ESST (or knowingly assisting others to do so) may attract criminal and administrative penalties.
ESSTs can come in different forms and are constantly evolving, some examples include:
An ESST may allow income to be misrepresented and under-reported by:
Transitional arrangements are in place for six months starting from 4 October 2018 to 3 April 2019 for possessing an ESST.
Taxpayers may avoid committing an offence for possessing an ESST if they:
Importantly, the transitional provisions do not apply to the manufacture, development, publication, supply or use of an ESST.
Depending on the offence and severity of the crime, taxpayers can face financial penalties of up to 5,000 penalty units, which currently equates to over $1 million.
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