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AUSTRAC industry contribution FAQs

These frequently asked questions (FAQs) should be read in conjunction with the Ministerial Determination to determine the amount of the industry contribution levy for the relevant financial year. The Ministerial Determination will be made shortly after the census day for each year.

AUSTRAC will publish final Determinations on its website when they are available.

Contents


About the industry contribution

What is the industry contribution?

The AUSTRAC industry contribution is a levy on reporting entities to recover the costs of AUSTRAC's two complementary functions: as Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regulator and financial intelligence unit. The industry contribution arrangements apply from the 2014–15 financial year.

The industry contribution was announced by the Federal Government as part of the 2014 Budget. It replaces the cost recovery arrangements previously administered by AUSTRAC (known as the AUSTRAC supervisory levy).

What is the legal basis for the industry contribution?

Legislation to enable AUSTRAC to recover the costs of its activities from the businesses it regulates is set out in two Acts:

  • Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011
  • Australian Transaction Reports and Analysis Centre Industry Contribution (Collection) Act 2011.

These Acts are accessible via the AUSTRAC industry contribution legislation page.

How is the amount of the industry contribution set?

The industry contribution for each financial year is set by way of a Ministerial Determination.  Under this determination, the Minister for Justice will specify the method or methods to determine the liability of each leviable entity or class of leviable entity.

Ministerial Determinations can be accessed via the AUSTRAC industry contribution legislation page of the AUSTRAC website.

What AUSTRAC activities will be funded by the industry contribution?

The total amount that AUSTRAC collects through the AUSTRAC industry contribution arrangements funds AUSTRAC's activities as Australia's AML/CTF regulator and financial intelligence unit.

The amount is calculated as a percentage of AUSTRAC's operating costs, including amortisation and annual depreciation costs of assets used by AUSTRAC in undertaking its regulatory and intelligence activities – for example, AUSTRAC's information management and data analysis systems.

The proportion of AUSTRAC's operating costs to be recovered each financial year under the industry contribution levy was initially announced in the 2014 Budget and subsequently updated in the Mid-Year Economic and Fiscal Outlook (MYEFO) of 15 December 2015. The proportions are:

  • 2014–15 - 70%
  • 2015–16 - 90%
  • 2016–17 - (and onwards) - 100%

The industry contribution is not used to recover the costs incurred under AUSTRAC's international technical assistance and training programs, or any other expenditures related to programs which are not funded directly by Government appropriation.

When does AUSTRAC determine if a reporting entity is liable to pay the levy?

The liability for an entity to pay the levy will be determined on the 'census day' for a financial year.

The census day for each financial year is nominated in the industry contribution legislation as 1 July each year.  This day may be varied by the AUSTRAC Chief Executive Officer (CEO) if he or she determines that a later census day is to apply.  If a later census day is to apply, the CEO determination will be made prior to the commencement of that financial year.

Who is required to pay the levy?

A reporting entity that is liable to pay the levy is an entity that was required to be enrolled with AUSTRAC on the ‘census day’ (normally 1 July each year).

It is the responsibility of each entity to ensure that its enrolment information is correct at the census day.

If an entity's enrolment information as recorded in AUSTRAC Online (that is, in the AUSTRAC business profile form (ABPF)) indicates that an entity is not an 'exempt entity' on that day, the industry contribution charges will be payable.

Entities will not be required to pay a levy if the following applies:

  • If the entity is an affiliate of a registered remittance network and did not provide a designated service in any other capacity (Where the affiliate does not provide any designated services under the AML/CTF Act except as a remittance affiliate).  Affiliates are excluded on the basis that AUSTRAC's primary regulatory relationship is with the registered remittance network provider rather than with individual affiliates.
  • If the entity has been exempted from Part 7 of the AML/CTF Act.
  • If, on the census day for the financial year, the entity is a 'Market Generator' within the meaning of the National Electricity Rules, or
  • If, on the census day for the financial year, the entity is a body corporate established for a public purpose by an Act passed by the Parliament of the Commonwealth.

Where leviable entities lodge transaction reports, they will not be charged if the calculated levy is less than $1,000.00.

When will entities be billed for the industry contribution?

From 2016–17 onwards, AUSTRAC expects to issue invoices to leviable entities during the first quarter of the relevant financial year.

Can an entity recover the levy cost from customers?

Individual leviable entities must determine for themselves whether or not to pass on the annual levy cost to customers.

Can reporting entities reduce the number of reports they submit to reduce the amount of the levy?

The consequences of non-compliance with reporting obligations are potentially far greater than the cost of the transaction reporting component of the levy calculation.

The failure to lodge reports may trigger civil penalty proceedings in the Federal Court resulting in civil penalty orders up to $17 million.

In addition, conducting transactions to avoid submitting threshold transaction reports to AUSTRAC is a criminal offence punishable by five years imprisonment, a fine of $51,000, or both (subsection 142(1) of the AML/CTF Act).

A range of other enforcement actions, including remedial directions, enforceable undertakings and the appointment of external auditors are also available to AUSTRAC.

Is the levy tax deductable?

As entities have different taxation obligations. AUSTRAC recommends reporting entities seek their own advice from taxation professionals.

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Calculation of the industry contribution levy

What are the components of the industry contribution levy?

The industry contribution levy comprises two components: an earnings component and a component for transaction reporting activities.

The earnings component applies to leviable entities with annual earnings of $100 million or more (in the most recent financial year).  It is calculated based on the earnings of an entity on the census day. If an entity is part of a group and is related to other leviable entities, the earnings component amount is based on the total earnings of the group, divided among the individual group members.

The transaction reporting component (TRC) applies to leviable entities that lodge transaction reports.  This includes threshold transaction reports (TTR) and international funds transfer instruction reports (IFTIs) submitted by an entity during the previous calendar year (not financial year).

The total TRC contains the following two elements:

  • volume element representing the unit cost multiplied by the number of reports submitted during the January to December period in the previous calendar year, and
  • value element representing the unit cost multiplied by the value of the reports submitted during the January to December period in the previous calendar year.

How is the levy amount calculated?

The levy for each entity will be calculated according to the enrolment details provided by the entity at the census date (including earnings information).  Information on the Reporting Entities Roll will be used to determine which levy components are relevant to each entity.  The individual levy components will be itemised and shown separately on the entity's levy invoice.

It is the responsibility of each entity to ensure that its enrolment information is correct at the census day.

How is the earnings component of the levy calculated and who does it apply to?

The earnings component applies to a leviable entity or group of related leviable entities if the total earnings in the most recent annual financial statements of that entity or group of entities is greater than $100 million.

Where a leviable entity is a foreign company or a subsidiary of a foreign company, the earnings component will be based on earnings of the business derived from operations in Australia.  If the foreign entity is a member of a group, earnings is defined to include earnings from all leviable entities in the group (including domestic entities, if applicable) derived from operations in Australia.

For authorised deposit-taking institutions and Registered Financial Corporations as defined under the Financial Sector (Collection of Data) Act 2001 (or a group of leviable entities and any member is an authorised-deposit taking institution or Registered Financial Corporation) the applicable earnings measure is 'profit before income tax expense, depreciation and amortisation' (PBTDA).

For all other entities, the applicable earnings measure is 'earnings before income tax expense, interest, depreciation and amortisation' (EBITDA).

For more information on calculating earnings, reporting entities should refer to the following fact sheet:

The amount of the earnings component for each financial year is calculated by applying a percentage rate to an entity's declared earnings. The rate will be considered and reviewed annually and set out in a Ministerial Determination.

The Ministerial Determination for the annual levy will be made shortly after the census day. Once signed by the Minister, a copy of the Determination will be available via the AUSTRAC industry contribution legislation page.

How is the transaction reporting component of the levy calculated and who does it apply to?

The transaction reporting component (TRC) applies to all leviable entities that lodge transaction reports with AUSTRAC – that is, threshold transaction reports (TTRs) and international funds transfer instruction reports (IFTIs).
The TRC is made up of two elements:

  • the volume of reports lodged with AUSTRAC; and
  • the value of reports lodged.

The TRC will be calculated based on transaction reports lodged in the calendar year immediately prior to the commencement of the financial year to which the levy applies.  Suspicious matter reports (SMRs) are not subject to a levy.

Example: For the levy applicable to the financial year commencing 1 July 2015, the TRC is calculated on transaction reports lodged with AUSTRAC from 1 January 2014 to 31 December 2014. Transaction reports submitted during this period are subject to the levy (whether or not the reporting entity was required to submit those transaction reports to AUSTRAC).

The final amounts of the TRC for each financial year (both the volume and value elements) will be set out in a Ministerial Determination.  The final amounts may be different from estimated amounts depending on the number of leviable entities, micro businesses and the volume and value of leviable reports at the time the Ministerial Determination is made.

Once signed by the Minister, a copy of the Determination will be available via the AUSTRAC industry contribution legislation page.

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Paying the industry contribution levy

How long will reporting entities have to pay their levy invoice?

The industry contribution invoice is due for payment 30 days from the date the invoice is issued.

Late payment penalties will be applied to accounts that remain unpaid after the due date has passed.

What payment options are available?

Entities have the option to pay their levy by EFT, BPAY, credit card or cheque.  Payment information will be shown on the invoice.

Further details regarding each payment method can be found at the Pay your industry contribution page of the AUSTRAC website.

What can a reporting entity do if they believe the levy amount on the invoice is incorrect?

AUSTRAC will use information from the Reporting Entities Roll to determine whether an entity is leviable, and to determine the amount of the levy. The roll contains business information that is completed and submitted by entities via the AUSTRAC Business Profile Form (ABPF).

There are a number of potential situations where an entity might not agree with the information used to generate the levy invoice.  These include:

  • Incorrect enrolment information.  Entities that find their enrolment information was incorrect on the census day.
  • Not a leviable entity.  An entity considers itself to be an exempt entity and believes it should not have received an invoice.
  • Incorrect transaction reports data.  Entities that consider the volume and value of reports levied for the period are incorrect. These entities should contact AUSTRAC in writing. Correspondence should include the entity's contact information, AUSTRAC account number, invoice number, and a detailed explanation outlining the particulars of the reporting discrepancy.

Entities wishing to dispute their levy invoice must complete the AUSTRAC industry contribution levy dispute form. The form can be found on the AUSTRAC industry contribution information page of the AUSTRAC website.

The form should include the entity's contact information, invoice number and a detailed explanation of the enrolment information that was incorrect on the census day. The form should be lodged with AUSTRAC in the period after the invoices have been issued but before the payment due date.

Entities that do not have access to the internet and require the form to be mailed to them should contact the AUSTRAC Contact Centre on 1300 021 037.

Should a reporting entity pay the levy if the levy has been disputed?

Any levy amount that is not paid by the due date will incur a late payment penalty (refer below - 'What will happen if reporting entities are late paying the levy?'). If an entity has lodged a dispute and does not pay the levy, late payment penalties will be applied.

If the dispute is settled in the entity's favour, payment of the levy and late payment penalty may be waived.  However, if the dispute is settled in AUSTRAC's favour, the entity will be liable to pay the original levy and all late payment penalties.

If the levy is paid by the due date and the dispute is settled in the entity's favour, AUSTRAC will refund any excess payment.

Can AUSTRAC waive a levy payment?

Under section 11 of the Australian Transaction Reports and Analysis Centre Industry Contribution (Collection) Act 2011(the Collection Act), the AUSTRAC Chief Executive Officer (AUSTRAC CEO) has the power to waive payment of a part or the whole of the AUSTRAC industry contribution levy or any late payment penalty relating to that levy.

The Collection Act does not specify the circumstances under which payment can be waived.  However, the Explanatory Memorandum to the Collection Act notes the circumstances in which the AUSTRAC CEO may consider it appropriate to waive payment including where recovery of the levy would be inequitable or would cause ongoing financial hardship.  These two categories are explained further below.

When are payments waived?

The power of the AUSTRAC CEO to waive payment is discretionary.  This means that there is no automatic entitlement to a waiver of payment of a levy or a late payment penalty.

The circumstances under which the AUSTRAC CEO may consider it appropriate to waive payment of the levy (and/or related late payment penalty) include where recovery would be inequitable or a reporting entity is experiencing ongoing financial hardship and that other payment options (such as deferring payment) are not appropriate.  There may be other circumstances in which a waiver may be appropriate.  These will be considered on a case-by-case basis.

Waiving of an entity's levy payment is generally an avenue of last resort and will only be used where there is no other viable means to address an entity's circumstances.

Where would recovery be inequitable?

AUSTRAC considers that recovery of the industry contribution from a leviable entity would be inequitable where the impact of applying the calculation model in a reporting entity's particular circumstances has resulted in that entity incurring an unintended levy, or a levy of unintended quantum.

How do reporting entities apply for a waiver of payment?

Entities who wish to apply for a waiver of payment must make the application in writing and should complete the AUSTRAC industry contribution levy dispute form.  The form can be found on the AUSTRAC industry contribution information page of the AUSTRAC website.

Entities that do not have access to the internet and require the form to be mailed to them should contact the AUSTRAC Contact Centre on 1300 021 037.

Requests for waiver of payment should be made in relation to a levy for a specific year, and should be lodged with AUSTRAC in the period after the invoices have been issued but before the payment due date.

What is ongoing financial hardship?

Ongoing financial hardship is where payment of the AUSTRAC industry contribution would leave a reporting entity unable to continue its business.

AUSTRAC will only consider waiving payment of the levy (or late payment penalty) where a reporting entity is able to demonstrate that it is experiencing ongoing financial hardship.  Where a reporting entity is experiencing short-term financial difficulties AUSTRAC may consider other payment arrangements, including deferring payment or payment by instalments.

Entities that wish to apply for a waiver of payment on the grounds of ongoing financial hardship should in the first instance – that is, before submitting a levy dispute form – contact the AUSTRAC Contact Centre on 1300 021 037 or at contact@austrac.gov.au to arrange for a member of AUSTRAC's finance team to contact them to discuss their circumstances.

What information do reporting entities need to provide AUSTRAC to support a claim for ongoing financial hardship?

A reporting entity may be requested to provide information about its financial situation, including details of income, expenditure, assets and liabilities.

As the circumstances for each applicant will vary, the information will be sought on an 'as needed' basis and could also include the requirement to supply information regarding both business and personal finances of business owners (sole proprietorship or an unincorporated trading entity that is not an association or registered charitable organisation).

When will a decision be made regarding an application for waiver of payment?

AUSTRAC will make a decision on an application as soon as possible. AUSTRAC will not undertake any collection activity on an unpaid levy while it is considering a reporting entity's application for waiver of payment.

Please note that if a reporting entity does not pay its levy by the due date as set out on the levy invoice, late payment penalties will accrue while any waiver application is being considered.  As part of assessing an application for waiver, irrespective of whether the levy payment is waived, AUSTRAC will also consider whether it is appropriate to:

  • waive any late payment penalty that has accrued whilst assessing the application; and
  • waive any late payment penalty that may accrue between the time a decision is made and payment can reasonably be made by the entity (where the levy is not waived in part or in full).

Applicants will be informed of AUSTRAC's decision in writing.

What happens if an application for waiver of payment is successful?

Once a decision has been made to waive payment, AUSTRAC will notify the applicant in writing of the decision and will amend or credit the entity's account accordingly.

Where an entity has made a payment and AUSTRAC later determines that an amount paid was not required to be paid, AUSTRAC will refund any excess payment.

Do reporting entities have to reapply for separate waivers for each specific levy year?

Entities must reapply for a waiver of payment of the industry contribution invoice amount for each specific levy year.

A decision to waive payment only applies to the levy period (that is, the financial year) for which the waiver request was submitted.

Entities that receive a waiver of payment for one levy period will continue to be invoiced each subsequent levy period for the amount payable under the Ministerial Determination.

What options do reporting entities have if their application for waiver is unsuccessful?

If a reporting entity is dissatisfied with AUSTRAC's decision it may request that the AUSTRAC CEO reconsider the decision.

The request must:

  • be made in writing within 21 days (unless an extension is granted) of receiving written notice of AUSTRAC's decision not to waive all or part of the payment owed; and
  • clearly outline the reasons for requesting the review.

AUSTRAC will review the decision within 42 days of receiving the request for an internal review.

Applicants will be informed in writing of AUSTRAC's decision, including the reasons for that decision.

Entities that are not satisfied with the outcome of the internal review may make an application to the Administrative Appeals Tribunal (AAT) for a review of AUSTRAC's decision.

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Failure to pay the industry contribution levy invoice

What should a reporting entity do if they cannot pay the levy amount invoiced, or pay by the due date?

Reporting entities unable to pay the levy amount invoiced by the due date must contact AUSTRAC on 1300 021 037 prior to the payment due date.

What will happen if reporting entities are late paying the levy?

Late payment penalties will be applied to any levy amounts not paid by the date specified on the invoice and which remain unpaid at the beginning of the following calendar month.

How are late payment penalties calculated?

Late payment penalties are calculated on any levy amount outstanding at the beginning of the calendar month following the levy due date.

The late payment penalty is calculated at 20% per annum and is charged monthly (non-compounding).

What correspondence will reporting entities receive from AUSTRAC regarding overdue accounts?

AUSTRAC will notify all reporting entities that have not paid their levy by the due date.

An account summary will be forwarded each month detailing the outstanding levy balance(s) and any late payment penalties incurred.

It is the responsibility of the reporting entity to ensure that they keep all mail, email and AML/CTF contact information up to date via AUSTRAC Online . Civil penalties may apply.

What will happen if reporting entities do not pay their levy or late payment penalty?

The levy and late payment penalty are debts owing to the Commonwealth of Australia and can be recovered by the AUSTRAC CEO.

The AUSTRAC CEO may refer overdue payments to another entity (for example, a commercial debt collection agency or solicitor) and may take court proceedings to recover the debt.

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Further information

What should a reporting entity do if they have questions about the contribution levy or their levy invoice?

Reporting entities with questions about the industry contribution levy or their levy invoice should contact the AUSTRAC Contact Centre via:

The Contact Centre operates from 8.30am to 5.00pm, Monday to Friday, Australian Eastern Standard Time.

Emailed enquiries should include the reporting entity's AUSTRAC Account Number, located on the top right-hand side of the invoice (or document number).

To ensure an effective and timely response by AUSTRAC, entities should ensure their question is stated clearly, with the preferred method of response and person to contact regarding the enquiry (including best time and authorised person to contact).

Translating and interpreting assistance:

  • To access a free translation service, call the Translating and Interpreting Service on 131 450 and ask them to call AUSTRAC on 1300 021 037.

National Relay Service:

  • TTY/voice: 133 677 and ask for 1300 021 037
  • Speak and listen (SSR): 1300 555 727 and ask for 1300 021 037.

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Last modified: 06/05/2016 15:40