Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p25
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 25/56)
Character Range: 328695–331681

to have evaded a licence fee, it would not be compulsory for the entity to retrospectively obtain the licence. Any consequence for undertaking unlicensed activities would be in the nature of a fine or other penalty (ie the entity would not be compelled to obtain a licence).  In contrast, an entity found to have evaded a tax would be compelled to pay the tax in addition to any fine or other penalty. The Board decided that, in distinguishing a licence from a tax, the notion of compulsion by reference to whether an entity would have discretion over whether to obtain a licence or not would be useful as a primary or singular point of distinction between a licence and tax.

     BC21            In relation to the purpose of the payment, the definition of tax in AASB 1058 states that "taxes are established to provide income to the government". The Board considered whether licences could be differentiated such that the primary purpose of the arrangement would be non-financial, for example to regulate social behaviour, or to allocate a public resource equitably. In considering the usefulness of this discriminator, the Board acknowledged some licence arrangements could arguably have multiple purposes (ie both financial and non-financial), or could have a primarily financial purpose on an ongoing basis. The Board noted that the relativity of the proceeds received and the costs incurred might be indicative that a tax component exists. Consequently, the usefulness of the purpose of establishment as a distinguishing feature between a licence and tax could be of limited use if considered as a primary distinguishing feature or in isolation.  Accordingly, the Board decided that although the purpose could be a useful feature to consider dependent on the specific facts and circumstances of an arrangement in conjunction with the other features, it should not be used as a primary or singular point of distinction between a licence and tax.

Other Australian Accounting Standards
     BC22            The Board considered, but did not identify any features of licences implicit in the following Australian Accounting Standards:

          (a)                    AASB 15;

          (b)                   AASB 16;

          (c)                    AASB 138 Intangible Assets; and

          (d)                   AASB 1059.

The IPSASB
     BC23            In identifying other features distinguishing licences from taxes, the Board considered the IPSASB's project work regarding the accounting for revenue transactions. The Board noted the IPSASB, at the time this Standard was issued, had not specifically considered the accounting for revenue from licences issued by NFP public sector entities, nor defined the term 'licence' in any IPSAS.

ABS GFS Manual
     BC24            In developing ED 283, the Board also considered the approach adopted in the ABS GFS Manual in respect of distinguishing licences from other arrangements. The Board noted the ABS GFS Manual defines