Australia

ATO could cancel your ABN if there is no business activity detected Australia's Tax Office has issued an important announcement regarding ABN holders. The Australian Business Number (ABN) is a unique 11-digit number that identifies your business to the government. Taxpayers are required to register for an ABN for certain tax purposes, such as goods and services tax (GST) and pay as you go (PAYG) withholding. As stated in this recent announcement by ATO, an ABN could be flagged for cancellation if the holder has not reported business activities in their tax returns, or if there is no evidence of business activity in other lodgements or third-party information. In the event that an ABN has been identified as inactive, the ATO will notify the holder of the next steps, whether they are to reactivate or cancel the ABN.

Government encourages the adoption of PEPPOL e-invoicing  Australia has mandated business-to-government (B2G) e-Invoicing since July 2022, requiring government agencies to adopt the use of PEPPOL e-Invoicing. Further on, the Australia Taxation Office (ATO) announced a Business e-Invoicing Right (BER) initiative to promote business-to-business (B2B) e-invoicing in a gradual phase, starting with large companies from July 2023. Under  this initiative, businesses are legally obliged to adopt and send e-invoices if requested by their customers. This means that Australia is not implementing a government-led e-Invoicing mandate (aka as Continuous Transaction Control), but rather seeks to stimulate the  uptake of e-Invoicing through ‘market dynamics’.   The ATO remains committed to encouraging the adoption of e-invoicing, and recently published an article on the benefits of PEPPOL e-invoicing for SMEs. With more than 18,000 businesses already using eInvoicing, the government expects a significant growth in the use of e-invoicing over the next 12 months.  

Government proposal of Business E-invoicing Right (BER) Australia has proposed a Business E-invoicing Right (BER) to encourage wider business adoption of e-invoicing. Under this proposal, businesses are legally obliged to adopt and send e‑invoices if requested by their customers. BER will be implemented first on large businesses by July 1, 2023, then on medium businesses by July 1, 2024, and on small businesses by July 1, 2025. The Australian government has initiated a public consultation to seek stakeholder opinions on BER and further measures to support business adoption of e-invoicing. It will not be long before we learn more about the BER project.

Supporting business adoption of e-invoicing

In the 2021-22 Budget, the government invests another $15.3 million in the Digital Economy Strategy to increase the value of e-invoicing to businesses, improve business awareness, and accelerate e-invoicing adoption. However, according to feedback from Stakeholder Consultation in 2020-21, e-invoicing adoption remains low in Australia despite strong government support.

To further support business adoption of e-invoicing, the Australian Government has launched a public consultation seeking stakeholder views. If you would like to express your views on e-invoicing, you can submit responses up until 25 February 2022. For further information, please refer to the Australian government website.

B2G e-invoice mandate

The Australian government has announced to mandate e-invoicing for all levels of government by 1^st July 2022 as part of the Digital Business Plan. Australia operates its e-invoicing system based on the PEPPOL framework. To send or receive an e-invoice, a business must connect to the PEPPOL Network through an Access Point. Australia’s Tax Office manages a registry of Access Point servers that have been officially accredited by the tax office.

B2G e-invoice mandate

The Australian government has announced to mandate e-invoicing for all levels of government by 1^st July 2022 as part of the Digital Business Plan. Australia operates its e-invoicing system based on the PEPPOL framework. To send or receive an e-invoice, a business must connect to the PEPPOL Network through an Access Point. Australia’s Tax Office manages a registry of Access Point servers that have been officially accredited by the tax office.

Funding for adoption of e-invoicing

Greater awareness around e-invoicing is being promoted in Australia- the Government will provide $15.3 million in funding to increase awareness of the value of e-invoicing for all businesses. This follows the announcement that e-invoicing will be mandatory for all Commonwealth agencies from 1 July 2022. This funding will support the Treasury and the Australian Peppol E-Invoicing Authority to improve business e-invoicing awareness and adoption. The aim is to assist in the adoption of Peppol e-Invoicing in the private and public sectors and lay further foundations for an expected national e-invoicing mandate.