This Guide Is a Resource for All Tax Professionals

ELS guide 20176

Welcome

This guide is a resource for all tax professionals.

Use the guide to supplement – not replace – the supporting documentation provided with your software. Some ELS features we describe will be implemented differently or unavailable in some software packages.

For tax time 2017 not all forms and reports will be available in ELS. The forms, reports and services are beingwill be progressively moved to the new pPractitioner Llodgment Sservice (PLS). PLS uses Standard Business Reporting (SBR) for lodgment and interaction with usto lodge and interact with us, so your software must be SBR-enabled before you can use the service. Contact your software provider for more information.

What's new?

We maintain a catalogue of changes for each edition of the current year's ELS guide. The latest edition is listed below.

New content

Summary of new content

1.  There is no new contentNon- Resident foreign income schedule - new

2.  Simpler BAS options for the ELS - new

Updated or Deleted content

Summary of updated or deleted content

1.  Super member contributions statements and Assessment variation advice (MCS and AVA)Fringe bBenefit income tax returns for 2017 (note 2016 and prior years can still be lodged through the ELS) - deleted

2.  Telstra Dial IP network - deleted

The ELS specifications - The information in this guide meets the specifications used by your software developer to deliver the 20167 upgrade.

Guide Overview

General information

This section provides a basic overview of the ELS including its key principles and basic operations.

ELS returns and related schedules

This section lists the forms you can lodge through the ELS, including the required business rules if appropriate. This chapter defines some forms that may not be supported by your software at this time. You should consult your software developer to find out whether they plan to cater for any of these missing forms.

ELS data communications

How to access ELS, what facilities you need before you can connect with ELS, and how to resolve some problems that may arise.

Correcting return form errors

This section describes form lodgment through the ELS and how to manage errors that may occur with lodgment

Reports from our business systems

Describes the reports we can give you that are derived from our business systems.

Appendix A lists and explains all the errors that the ELS might find on a tax return.

Appendix B is an index of tags and data items found on tax returns.

Appendices C–M contains valid codes for specific data items.

Appendix N contains preferred paper formats with tags.

If you haven't used ELS before

If you are new to ELS, you should familiarise yourself with the basic operation of your software package. Start by referring to the communications component to find out how it communicates with ELS and what steps you must follow.

Some initial concepts of how all packages communicate with ELS are provided in General Information and ELS Data Communications.

If you experience problems in communicating, refer to troubleshooting.

You must read the validation report section. If we reject any of your returns, this report will explain why.

Appendix A gives more detailed information about why errors may occur.

Appendixes C to J provide lists of valid codes for certain data items used in preparing returns.

If you haven’t used ELS before, a declaration pro-forma must be completed and retained by the taxpayer for tax returns, FBT returns, activity statements, application for private ruling, and Family Trust, Interposed Entity, Excess Concessional Contributions elections, and Product Stewardship (Oil) scheme claims.

If a paper copy of a return is needed, your package must produce this in line with the formats explained in appendix N.

If you are an experienced ELS user

Experienced users may only need to see appendix A to understand why a return has been rejected.

If you experience problems communicating with ELS, refer to troubleshooting.

Returns rejected by the ELS

If the ELS rejects any of your returns, the validation report will tell you why.

Additionally, appendix A gives a more detailed explanation of why errors have occurred.

Appendixes C–J provides lists of valid codes for certain data items used in preparing returns.

Reports available through the ELS

You can request various reports through the ELS. For more information about reports that can be requested and how to request them, see reports for your business systems.

General information

The ELS receives electronic returns from agents who transmit data to the ELS validation application. These operate on our corporate external gateway computers and we call this the gateway.

Before transmission, data items are assembled into a continuous sequence of characters called an ‘electronic data file’. The file contains all the information included in an electronic return. A number of such files, together with a transmitter identification file (called the ‘TXID file’), make up a transmission.

Software that prepares files must subject them to specified edit tests before transmission. Returns containing errors must be corrected before transmission to the gateway. Returns must not be sent to us until they have passed all edit tests.

When transmissions are received by the gateway, the transmitting agency is sent a transmission report that tells them which files were received. The return files are validated and those that pass are sent for further processing. We send you a validation report that tells you which return files contain errors, the nature of those errors and which returns were accepted. You must correct and re-send any returns with errors.

Software

Software designed to transmit returns to us through the ELS must meet all our specifications.

Although electronic lodgment software may be integrated – that is, both tax preparation and communications components sold as one package – the two parts operate independently. Some electronic lodgment packages may be integrated with more general accounting office computer systems.

Tax preparation software:

■  helps you key tax return data into the computer

■  checks data for common errors

■  organises data into a form that can be read by our computers.

Communications software:

■  connects your computer to the ELS gateway so files can be transferred between them

■  sends your completed returns to the ELS gateway

■  receives status and error reports, bulletins and statistics from the ELS gateway.

Declaration for electronic lodgment and EFT consent

As allowed by tax law:

■  you can electronically lodge documents for your clients

■  we can pay some refunds by electronic funds transfer (EFT) if authorised by your client .

Administrative safeguards have been incorporated into the legislation to protect taxpayers and tax agents. For example, the taxpayer must sign a declaration before you can transmit their tax return.

Taxpayers and tax agents must still exercise care in preparation of returns and must keep certain records for specified periods. The penalties that apply to incorrect statements in paper documents equally apply to statements in electronically transmitted documents.

The electronic declaration can be made up of a number of parts depending on the form. The main sections are the:

■  taxpayer declaration

■  EFT declaration

■  tax agent certificate.

To help you meet these obligations, your software may not allow you to transmit a form to us if you have not recorded in your system that you have completed a required declaration.

Taxpayer declaration – the taxpayer’s obligations

The taxpayer must provide you with a written and signed declaration that contains the following statements:

■  the information provided to you for the preparation of the document is true and correct

■  you are authorised to give the document to us.

You must not transmit the document to us before the declaration is made. You and your client can decide how and when the declaration is given to you. The declaration can be given to you in person, by post or fax. It can also be emailed if there is some form of electronic signature.

Taxpayers must keep the declaration for either:

■  five years after the declaration is made

■  two years after the declaration is made if the taxpayer is an individual with simple tax affairs, for whom a shortened retention period applies.

Taxpayers must produce the declaration (or a copy) if we request to see it within those periods. There is an administrative penalty of 20 penalty units (currently $3,600) for failing to retain or produce the taxpayer declaration appropriately.

It is an offence to make a false or misleading statement to us. The taxpayer is deemed to have made the statements in any electronic return lodged by you, unless the taxpayer did not authorise the statement.

EFT declaration

We pay refunds electronically to a properly nominated financial institution account, including a third party account.

The taxpayer must complete a written declaration nominating the account and authorising us to pay the refund electronically. Part B of the EFT declaration is designed for this purpose.

The declaration will apply to all income tax payments made by us until a subsequent declaration is provided.

The reconciliation report shows details of the EFT refunds sent to your trust account.

See also:

■  Type of reports

Tax agent certificate – your obligations

All activity statements, tax returns, FBT returns and several other applications and forms lodged electronically on behalf of your clients must contain your tax agent declaration with your electronic signature. You must also obtain a written and signed taxpayer declaration from your client before transmitting the return.

You must provide a declaration stating all of the following:

■  the document has been prepared in accordance with the information supplied by the entity (your client)

■  you have received a declaration from the entity stating that the information provided to you is true and correct

■  you are authorised by the entity to give the document to us.

If you are using your own facilities (that is, you are registered as a transmitter) your tax agent declaration must be provided electronically. ELS software includes an electronic signature that is your unique identifier.

If you are using someone else’s facilities (that is, you are registered as a preparer) you must append your tax agent declaration to the taxpayer's declaration. This is because you are not the transmitter of the return and the electronic signature is not your unique identifier. The electronic declaration (usually part C) includes a tax agent certificate for shared facility users.

When you receive the original notice of assessment, you must give your client the original or a copy. They can then see the amount of the tax refund or debt and check whether there are any errors.

There is no requirement for you to prepare or keep a paper tax return if you have provided an electronic one to us on behalf of your client.

Declarations – where you can get them

Your software must allow you to print a declaration in the required format.

Declarations – lodging by paper

If you are unable to lodge a form through the ELS, your software may allow you to print a paper copy of the return that you can lodge with us.

If lodging this form with us, you and your client must sign all relevant declarations as if you were using our stationery equivalent.

What is an electronic return?

A return lodged through the ELS does not look like the paper copy of the form.

The data in the electronic return is sent to us as a long, unbroken string of characters. For example, the data items included on a return to specify payment summary details appear as:

... ^AQAABC Company Ltd^AQB1990.82^AQEl0000 ...

A tag is used on an electronic return to identify a specific item of information. For example, the tag ‘^AQA’ above tells the ELS that the next piece of information is the name of a company on a payment summary, in this case ABC Company Ltd. Similarly, ‘^AQB’ means that the next data item is the amount of tax withheld on the payment summary from ABC Company Ltd.

Returns are organised in this way to reduce transmission costs and to enable the ELS to reliably recognise every piece of data. You need to associate a tag with the respective data item on the return because this is one way that errors are reported by the ELS. Item descriptions are also provided.

See also:

■  Validation report

Transmission media

The only way to lodge electronic returns is via the Dial IP network or the internet.

The Telstra Dial IP network has been removedis no longer available., Yyou will need to have an internet connection to use the ELS post 30 Junefrom 1 July 2017. For more information contact your software provider for assistance or refer to your user manual.

Transmission structure

A transmission to the ELS includes a collection of files made up of one transmission identification (TXID) file followed by one or more return files.

A single transmission must be transmitted during a single communications session. More precisely, a transmission occurs each time you start a file transmission in the transmit mode.

A transmission must include one TXID file and from one to 1,000 return files.