The Tax office is now focusing on compliance with record keeping standards. Their approach to record keeping is to influence a positive change in the compliance behaviour by educating and assisting entities in a way that will help them meet their record keeping obligations.xml:namespace prefix = o />
The general record keeping provisions require an entity to keep all documentation, that record and explain all transactions and other acts engaged in by the persons that are relevant for the purposes of the relevant act. Generally these records must be kept for 5 years.
The Tax Office recognises that there may be isolated instances where an entity misplaces or loses documents that explain a particular transaction. Where an entity has exercised reasonable care in keeping and maintaining records, but has unintentionally misplaced or lost isolated documents, any record keeping penalty that would otherwise be applicable will be remitted in full.
An entity will usually be given the opportunity to improve its record keeping before a record keeping penalty is considered. The record keeping penalty is one of the final actions taken in an effort to influence a change in an entities record keeping behaviour and , in most cases, will be used only where help and education have failed to change behaviour. Penalties can reach the value of $2,200.
Please see http://law.ato.gov.au/pdf/ps05_002.pdf for more information, or contact us admin@mt.com.au
