On 14 Feb 2018, the ATO issued Taxation Ruling TR 2018/2 on the record-keeping obligations of business taxpayers (individuals and companies) where records are kept in electronic form.

The ruling contains a series of principles about electronic record-keeping. These principles are that:

  1. electronic records are recognised as documents for tax law purposes (Section 2B of the Acts Interpretation Act 1901 defines ‘document’ and extends the meaning of ‘record’ to include information stored or recorded by means of a computer);
  2. business taxpayers must keep records that record and explain all transactions and other acts they engage in which are relevant for any purpose of the income tax law (s262A of the ITAA36);
  3. records must be kept of electronic business transactions. As a minimum, the date, amount and character of the transaction needs to be recorded;
  4. a hard copy of the information does not need to be kept (unless a particular rule requires it);
  5. electronic records must be in a form that the ATO can access and understand in order to ascertain the taxpayer’s income tax liability (if required);
  6. true and clear electronic reproductions of original paper records can be kept; and
  7. the taxpayer must ensure that electronic records are secure, accurate and maintained in accordance with the record-keeping requirements.
  8. The ruling notes that electronic records are subject to the same record-keeping requirements as paper records.

Referring to the Commissioner’s exercise of his information-gathering powers, the ruling makes the following points about access to documents stored electronically:

  1. if the ATO requires access to the document (under s353-15 of the TAA1), the person may provide it in either electronic or hard copy form, unless directed otherwise;
  2. the occupier of land, premises or a place being accessed must give the ATO reasonable use of facilities and assistance to extract electronically stored information, including login codes, encryption keys and passwords; and
  3. the Commissioner’s access powers can be used to obtain records stored in the cloud, even if the service provider is offshore.

Previous rulings withdrawn

Ruling TR 2018/2 was not previously issued as a draft. It is a “refresh” of Ruling TR 2005/9 (Record keeping – electronic records) and Determination TD 2002/16 (What are the obligations under the ITAA 1936 where a business chooses to keep some of its records as encrypted information?), which were withdrawn on and with effect from Wed 14.2.2018. The ATO view is unchanged, although references to electronic storage mediums such as magnetic tapes and floppy discs have been removed.

DATE OF EFFECT: TR 2018/2 applies before and after its date of issue.

[ATO website: TR 2018/2; LTN 30, 14/2/18; FJM; Tax Month February 2018]


Study questions (answers available)

  1. Does TR 2018/2 replace TR 2005/9 and TD 2002/16, which are all about storage of, and access to, electronic documents and records?
  2. Is the principal provision requiring taxpayers to keep records to be found in s262 of the ITAA36?
  3. Is the key provision, that extends laws about ‘documents’ and ‘records’, to electronic documents, s2B of the Acts Interpretation Act 1901?
  4. Is the Commissioner’s access power in s353-10 of the TAA1?
  5. Does this ruling only apply from the 14.2.2018 date on which it was issued?




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