Taxation Ruling TR 2018/2
Date of effect: 14 February 2018

What this ruling is about: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

Class of entities or scheme: 1. This Ruling explains our (the ATO's) view on record keeping in electronic form for the purposes of section 262A of the Income Tax Assessment Act 1936 (ITAA 1936). It discusses how you must retain and, when required, provide access to electronic records [1] , including encrypted records, records created from e-commerce and records stored in the cloud. [2] It applies to individuals and companies carrying on a business. | Electronic records: 2. Records stored or recorded by means of a computer are recognised as documents for the purposes of Commonwealth legislation [3] , including the record keeping requirements [4] and access powers [5] in the taxation legislation. 3. Computer-generated documents are admissible evidence in taxation matters (subject to relevance and, where necessary, proof of the competence of the computer device). [6] | Storage of electronic records: 4. If you are carrying on a business, you must keep records that record and explain all transactions and other acts you engage in that are relevant for any purpose of the income tax legislation. [7] Electronic records must be in a form that we can access and understand in order to ascertain your income tax liability when required. [8] | e-commerce transaction records: 5. For record keeping purposes, business transactions carried out electronically (for example, using either electronic data interchange (EDI) specific systems or the Internet) are no different from other forms of business transactions. [9] You are required to keep records that explain all electronic business transactions that are relevant for any income tax purpose. [10] The minimum information that must be recorded is: | Storage of paper records in electronic form: 6. You may keep true and clear electronic reproductions of original paper records. However, documents created through conversion processes that do not produce a complete and accurate copy of original documents [11] are not considered to be a true and clear electronic reproduction. | Record keeping requirements for electronic records: 7. Any electronic records are subject to the same record keeping requirements as paper records. [12] This includes encrypted records, e-commerce records and records stored in the cloud. 8. Your record keeping must meet all four of these requirements: Other general requirements 9. Additional requirements may apply in specific circumstances (for example, some taxpayers may be required to retain records for different periods of time). [14] 10. It is generally not necessary to retain a hard copy of the information contained in an electronic record unless a particular law or regulation requires you to retain a paper copy. 11. It is your responsibility to ensure that your electronic records are secure, accurate and maintained in accordance with the record keeping requirements. 12. If you do not keep or retain records as required you may be liable to a penalty. [15] | ATO access powers and electronic records: 13. If we need to access electronic records you hold, we prefer to seek your cooperation in making it available to us. However, the laws we administer give us wide-ranging powers to obtain information, and in some situations we need to use these powers. 14. Under our powers to obtain information and evidence we can, by notice in writing, require you to produce any electronic document in your custody or under your control for the purposes of a taxation law. [16] We also have the right to full and free access to any electronic document and to make copies when required for the purposes of a taxation law. [17] 15. Similarly, our access powers permit us to access any printed copies of electronic records, as well as allowing us to read system and software manuals. 16. If we require access to, or for you to produce, a document or information that is stored electronically, you may provide it in either electronic form or a hard copy form unless we direct you otherwise. [18] 17. As the occupier of land, premises, or a place being accessed, you must provide us with reasonable use of your facilities and assistance to extract information you have stored electronically if we require it. What is considered 'reasonable' may vary on a case-by-case basis. 18. In the context of electronically stored records, reasonable facilities and assistance extends, where necessary, to the provision of login codes, keys (including encryption keys) and passwords. 19. There is an administrative penalty if you do not provide us with all reasonable facilities and assistance as required. [19] 20. If your electronic records are stored in the cloud and are immediately accessible to you, we can use our access powers to obtain them. We may also seek the records under a double tax agreement or under our offshore information notice power if the cloud service provider is offshore. [20] 21. This Ruling applies to years of income commencing both before and after its date of issue. However, the Ruling will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). Commissioner of Taxation 14 February 2018 22. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Ruling: Electronic records: 2. Records stored or recorded by means of a computer are recognised as documents for the purposes of Commonwealth legislation [3] , including the record keeping requirements [4] and access powers [5] in the taxation legislation. 3. Computer-generated documents are admissible evidence in taxation matters (subject to relevance and, where necessary, proof of the competence of the computer device). [6] | Storage of electronic records: 4. If you are carrying on a business, you must keep records that record and explain all transactions and other acts you engage in that are relevant for any purpose of the income tax legislation. [7] Electronic records must be in a form that we can access and understand in order to ascertain your income tax liability when required. [8] | e-commerce transaction records: 5. For record keeping purposes, business transactions carried out electronically (for example, using either electronic data interchange (EDI) specific systems or the Internet) are no different from other forms of business transactions. [9] You are required to keep records that explain all electronic business transactions that are relevant for any income tax purpose. [10] The minimum information that must be recorded is: | Storage of paper records in electronic form: 6. You may keep true and clear electronic reproductions of original paper records. However, documents created through conversion processes that do not produce a complete and accurate copy of original documents [11] are not considered to be a true and clear electronic reproduction. | Record keeping requirements for electronic records: 7. Any electronic records are subject to the same record keeping requirements as paper records. [12] This includes encrypted records, e-commerce records and records stored in the cloud. 8. Your record keeping must meet all four of these requirements: Other general requirements 9. Additional requirements may apply in specific circumstances (for example, some taxpayers may be required to retain records for different periods of time). [14] 10. It is generally not necessary to retain a hard copy of the information contained in an electronic record unless a particular law or regulation requires you to retain a paper copy. 11. It is your responsibility to ensure that your electronic records are secure, accurate and maintained in accordance with the record keeping requirements. 12. If you do not keep or retain records as required you may be liable to a penalty. [15] | ATO access powers and electronic records: 13. If we need to access electronic records you hold, we prefer to seek your cooperation in making it available to us. However, the laws we administer give us wide-ranging powers to obtain information, and in some situations we need to use these powers. 14. Under our powers to obtain information and evidence we can, by notice in writing, require you to produce any electronic document in your custody or under your control for the purposes of a taxation law. [16] We also have the right to full and free access to any electronic document and to make copies when required for the purposes of a taxation law. [17] 15. Similarly, our access powers permit us to access any printed copies of electronic records, as well as allowing us to read system and software manuals. 16. If we require access to, or for you to produce, a document or information that is stored electronically, you may provide it in either electronic form or a hard copy form unless we direct you otherwise. [18] 17. As the occupier of land, premises, or a place being accessed, you must provide us with reasonable use of your facilities and assistance to extract information you have stored electronically if we require it. What is considered 'reasonable' may vary on a case-by-case basis. 18. In the context of electronically stored records, reasonable facilities and assistance extends, where necessary, to the provision of login codes, keys (including encryption keys) and passwords. 19. There is an administrative penalty if you do not provide us with all reasonable facilities and assistance as required. [19] 20. If your electronic records are stored in the cloud and are immediately accessible to you, we can use our access powers to obtain them. We may also seek the records under a double tax agreement or under our offshore information notice power if the cloud service provider is offshore. [20]


Appendix: 22. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft


Summary - what this ruling is about | NOT LEGALLY BINDING SECTION: | Class of person/arrangement | Appendix 1 - Detailed contents list


Previous rulings: TR 2005/9 TD 2002/16
Related rulings: TR 96/7 TR 2006/10
Legislative references: ITAA 1936 ITAA 1936 6 ITAA 1936 262A ITAA 1936 262A(1) ITAA 1936 262A(2) ITAA 1936 262A(3)(b) ITAA 1936 262A(4) ITAA 1936 262A(5) ITAA 1997 ITAA 1997 995-1 TAA 1953 TAA 1953 2 TAA 1953 8L TAA 1953 8Q TAA 1953 8T TAA 1953 Sch 1 288-25 TAA 1953 Sch 1 Div 353 TAA 1953 Sch 1 353-10 TAA 1953 Sch 1 353-10(1)(c) TAA 1953 Sch 1 353-15 TAA 1953 Sch 1 353-15(3) Acts Interpretation Act 1901 Acts Interpretation Act 1901 2B Acts Interpretation Act 1901 25A Electronic Transactions Act 1999 Electronic Transactions Act 1999 9(1)(a) Electronic Transactions Act 1999 11 Electronic Transactions Act 1999 11(1)(a) Electronic Transactions Act 1999 11(1)(b) Electronic Transactions Act 1999 11(1)(c) Electronic Transactions Act 1999 11(2)(a) Electronic Transactions Act 1999 11(2)(b) Electronic Transactions Act 1999 11(2)(c) Electronic Transactions Act 1999 12(1)(a) Evidence Act 1995
Case references: Federal Commissioner of Taxation v. Capron (1993) 25 ATR 142 93 ATC 4144
Other references: Our approach to information gathering (ato.gov.au)