Record Keeping
To assist you in meeting your statutory obligations and to ensure you are paying the correct amount of duty or taxes under a taxation Act, we perform audits and investigations as part of our role. Audits and investigations are also undertaken to ensure the eligibility of a person receiving a grant or subsidy.
The audits and investigations are carried out under the provisions of the following taxation legislations:
- Taxation Administration Act 2003(TAA 2003)
- First Home Owner Grant Act 2000(FHOG Act)
- Indian Ocean Territories (Administration of Laws) Act 1992
In general terms the State’s legislation authorises investigation officers to have full and free access to all buildings, documents, books and other records that are required to determine your tax liabilities.
Therefore, it is an essential requirement to keep proper records to determine your tax liability under a taxation Act.
The TAA 2003 came into effect on 1 January 2003 to standardise the administrative provisions of the various taxation Acts administered by OSR.
The following enactments are taxation Acts for the purposes of the TAA 2003:
- Debits Tax Act 2002 (abolished in 1 July 2005)
- Debits Tax Assessment Act 2002 (abolished in 1 July 2005)
- Land Tax Act 2002
- Land Tax Assessment Act 2002
- Metropolitan Region Improvement Tax Act 1959 as in force from and after the time of commencement of TAA 2003
- Section 41 of the Metropolitan Region Town Planning Scheme Act 1959 as in force from and after the commencement TAA 2003
- Section 200 of the Planning and Development Act 2005
- Pay-roll Tax Act 2002
- Pay-roll Tax Assessment Act 2002
- Stamp Act 1921 as in force from and after the time of commencement TAA 2003
- Any other enactment prescribed by the regulations as a taxation Act
Part 7 of the TAA 2003 outlines the record keeping requirements as follows:
What is a tax record?
Tax record: means a record required under a taxation Act or under a special tax return arrangement. (Note: under a special tax arrangement, the records could determine another person’s tax liability.)
Record: includes anything on or by which information is recorded or stored, eg documents, books, accounts, working papers, computer hard disks, floppy discs, etc.
How long are tax records to be kept?
Tax records must be retained for at least five years after they were made or the transaction to which they relate is completed. (Note: some taxation Acts may require records to be kept longer than five years.)
Form of tax records
These records must be kept in the English language or in some other form, which can be readily converted into the English language.
Where the tax records are to be kept
Tax records must be kept in Western Australia unless specifically to be kept elsewhere by the taxation Act, Taxation Administration Regulations 2003 or the Commissioner gives approval.
Failure to keep proper tax records
Failure to keep proper tax records is an offence and penalties can be imposed.
Offences under Part 7 of the TAA 2003 include:
- making a false or misleading entry in a tax record, knowing that the entry is false or misleading;
- keeping a tax record knowing that it is false or misleading in a material particular; or
- wilfully damaging or destroying a tax record.
A maximum penalty of $20,000 applies, plus 3 times the amount of tax avoided or potentially avoided if the tax record had been accepted as true.
General and specific exemptions
There are a number of general and specific exemptions to the tax record keeping requirements under Part 7 of the TAA 2003:
- An exemption may be made under the Taxation Administration Regulations 2003 in relation to record keeping requirements under a taxation Act. The regulations may also provide an exemption in relation to incidental requirements that relate to record keeping.
- An exemption may be given by a notice issued by the Commissioner exempting a person from a record keeping requirement under a taxation Act. The Commissioner may also exempt the person from incidental requirements that arise from the keeping of the tax record.
- The Commissioner may amend or cancel an exemption given under a notice.
- An exemption may be conditional on certain factors that are specified in the regulations or notice.
The regulations currently provide an exemption from record keeping for a company that has gone into liquidation and has been wound up; or for a financial institution in relation to stamp duty paid on a cheque.
Motor Vehicles
Further to the above record keeping requirements of the TAA 2003, there are additional and specific requirements for stamp duty on Vehicle Licences under Part IIIC of the Stamp Act 1921 and Regulation 8B of the Stamp Regulations 2003.
Online Stamping
For information on Online Stamping record keeping recommendations under a Special Tax Return Arrangements please refer to Online Stamping Record Keeping.