Eligible Revenue Threshold 2012-13 - FAQ

Eligible Revenue Threshold 2012-13 - FAQ

Eligible Revenue reporting threshold

July 20151 of 6

July 20151 of 6

INDEX

1.What telecommunications industry participants are required to report?

2.Who is a participating person?

3.What does it mean to be a participating person?

4.How does a carrier determine if it is a non-participating person?

5.What does it mean to be a part of a group?

6.What does it mean to be a non-participating person?

7.How can a carrier determine if its initial sales revenue is less than $25 million?

8.How can a carrier determine if its gross telecommunications sales revenue is less than $25 million?

9.How can a carrier determine if its eligible revenue is less than $25 million?

10.What is a declared or consolidated related party?

11.What is an ESD?

12.How does a carrier submit an eligible statutory declaration to the ACMA?

13.What happens if an ESD is not submitted by 31 October?

14. What if an ERR was required last year but I can submit an ESD this year?

15. How can I obtain further information?

1. What telecommunications industry participants are required to report?

A carrier is the holder of a carrier licence as defined in section 7 of the Telecommunications Act 1997 (the Telco Act). Each carrier is required to provide specified information to the Australian Communications and Media Authority (the ACMA) each year.

Reporting requirements are based on whether a carrier is:

> A participating person as defined in the Telecommunications (Consumer Protection and Service Standards) Act 1999 (TCPSS Act); or

> A non-participating person as defined in the Telecommunications (Participating Persons) Determination 2015 (Participating Person Determination).

2. Who is a participating person?

Under section 44 of the TCPSS Act a participating person for an eligible revenue period[1] is an entity that was a licensed carrier at any time during that eligible revenue period unless:

> The Minister has determined an amount in writing, and the person earns less gross telecommunications revenue than this amount.

> The person is of a kind that the Minister has determined in writing is exempt from section 44 of the TCPSS Act. Under the Participating Person Determination the Minister has determined that a person is not a participating person for an eligible revenue period, if the person meets the definition of a non-participating person for that period (refer to paragraph 4 below).

3. What does it mean to be a participating person?

A participating person must prepare an Eligible Revenue Return (ERR) which comprises:

  1. an ERR form;
  2. final financial statements on which the Return is based;
  3. 2014–15 outline of business structure—a diagram or description showing the structure of the group of companies and other entities, identifying all entities that earn telecommunications sales revenue including the participating person(s) and any consolidated and declared related parties; and
  4. Statutory Declaration—Management Certification pursuant to subsection 43(3) of the TCPSS Act.

Submit the ERR to the ACMA by
31 October (subsection 43(5) of the Participating Person Determination).

Information contained in the Return forms the basis for calculating:

> the telecommunications industry levy (TIL)

which funds the residual costs of the Department of Communications, after government funding, for provision of:

> reasonably accessible standard telephone services and payphone services to all Australians on an equitable basis, regardless of where they live or carry on business (the Universal Service Obligation (USO))

> a national telephone service to enable people with a hearing or speech impediment to make and receive telephone calls (the National Relay Service (NRS))

> delivery of emergency call services

> delivery of other public policy telecommunications outcomes

> the annual carrier licence charge (ACLC)—a charge to recover the cost of regulating the telecommunications industry. [2]

4. How does a carrier determine if it is a non-participating person?

Under subsection 4(3) of the Participating Person Determination for a carrier to be a non-participating person for an eligible revenue period two conditions must be met: revenue below the revenue threshold AND either an eligible statutory declaration (ESD) stating the revenue was below the threshold OR the ACMA must be otherwise reasonably satified that the person’s revenue was less than the threshold amount.[3]

Revenue thresholds

A non-participating person is a carrier that has at least one of the following:

  1. Initial sales revenue for the eligible revenue period of less than AUD$25 million (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis); OR
  2. Gross telecommunications sales revenue for the eligible revenue period of less than AUD$25 million (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis); OR
  3. Eligible revenue for the eligible revenue period of less than AUD$25 million (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis); AND

Eligible statutory declaration (ESD)

If a carrier meets the revenue threshold, it must also:

  1. provide to the ACMA an eligible statutory declaration stating that the carrier’s initial sales revenue, gross telecommunications sales revenue or eligible revenue (as applicable) for the eligible revenue period was less than AUD$25 million; OR
  2. the ACMA must be otherwise reasonably satisfied that the person’s eligible revenue for the eligible revenue period was less than AUD$25 million.

Where appropriate, each revenue threshold is to be calculated on a group basis (refer paragraph 5 below). For more information on the eligible statutory declaration, refer to paragraphs 12 and 13 below.

The carrier must provide the ACMA with an eligible statutory declaration by 31 October following the end of the relevant eligible revenue period.

Note that in addition to the eligible statutory declaration, the ACMA has the power to seek further information in support of a carrier’s statement that it is a non-participating person in accordance with section 521 of the Telco Act.

5. What does it mean to be a part of a group?

Subsection 4(4) of the Participating Person Determination specifies that if a person has the same ultimate Australian parent entity as one or more other licensed telecommunications carriers (a ‘grouped carrier’) then in determining whether the individual carrier is a participating person, it must calculate:

  1. initial sales revenue; and/or
  2. gross telecommunications sales revenue; and/or
  3. eligible revenue,

on a group basis, accounting for revenue and deductions as a whole and if any of these amounts as calculated are below AUD$25 million, then the grouped carrier can be considered a non-participating person on the basis of an eligible statutory declaration submitted by the due date.

6. What does it mean to be a non-participating person?

A licensed telecommunications carrier (carrier) who is a non-participating person for that eligible revenue period, will be exempt from:

> eligible revenue reporting requirements in accordance with the TCPSS Act;

> the TIL in accordance with the TCPSS Act; and

> the ACLC. [4]

A carrier who is a non-participating person for an eligible revenue period will continue to be subject to all other carrier requirements, including the requirements of the Telco Act relating to the provision of information to the ACMA where specified or required.

7. How can a carrier determine if its initial sales revenue is less than $25 million?

Initial sales revenue for the 2014-15 eligible revenue period is to be calculated in accordance with the Telecommunications (Eligible Revenue) Determination 2015 (Eligible Revenue Determination) (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis). Sources of initial sales revenue of a licensed telecommunications carrier should be in accordance with the audited consolidated financial statements of the ultimate Australian parent entity or other sources as referred to in section 12 of the Eligible Revenue Determination.

Sales revenue of declared and consolidated related parties is to be included.

A carrier’s initial sales revenue includes non-telecommunications sales revenue.

When a carrier can identify that its initial sales revenue, calculated in accordance with section 12 of the Eligible Revenue Determination (on a group basis where applicable) is less than AUD$25 million for the eligible revenue period, then to be considered a non-participating person the carrier must provide an eligible statutory declaration to the ACMA by 31 October, declaring that its initial sales revenue for the eligible revenue period was less than AUD$25 million.

8. How can a carrier determine if its gross telecommunications sales revenue is less than $25 million?

Gross telecommunications sales revenue for the 2014–15 eligible revenue period is calculated in accordance with Part 3 of the Eligible Revenue Determination (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis). The summary of eligible revenue calculation shows the steps involved in calculating the gross telecommunications sales revenue. Gross telecommunications sales revenue of declared and consolidated related parties is to be included.

A carrier’s gross telecommunications sales revenue includes telecommunications sales revenue earned from activity within and outside of the Australian telecommunications industry.

Carriers will be able to determine their gross telecommunications sales revenue by utilising the ERR Form published by the ACMA on its Eligible Revenue Portal for the specific eligible revenue period (gross telecommunications sales revenue must be calculated on a group basis where applicable). The steps involved in calculating gross telecommunications sales revenue are:

a) sales Revenue for the eligible revenue period

b) less Non-telecommunications sales revenue

c) plus Other telecommunications sales revenue

d) less Revenue earned whilst not the holder of a carrier licence

e) equals Gross telecommunications sales revenue.

When a carrier can identify that its gross telecommunications sales revenue is less than AUD$25 million for the eligible revenue period, then to be considered a non-participating person the carrier must provide an eligible statutory declaration to the ACMA by 31 October, declaring that its gross telecommunications sales revenue for the eligible revenue period is less than AUD$25 million.

9. How can a carrier determine if its eligible revenue is less than $25 million?

Eligible revenue for the 2014-15 eligible revenue period is to be calculated in accordance with Part 5 of the Eligible Revenue Determination (if the carrier has the same ultimate Australian parent entity as one or more other carriers, this calculation is to be performed on a group basis).

Eligible revenue of declared and consolidated related parties is to be included. For assistance, the summary of eligible revenue calculation or the ERR form available from the Eligible Revenue Portal on the ACMA website for the relevant eligible revenue period can be used.

A carrier’s initial sales or gross telecommunications sales revenue may be equal to or more than AUD$25 million for the eligible revenue period, however, its eligible revenue for the eligible revenue period may be less than AUD$25 million.

If a carrier has completed the calculation of eligible revenue as specified in the Eligible Revenue Return and has determined that its eligible revenue was less than AUD$25 million for the eligible revenue period (calculated on a group basis where applicable),[5] then to be a non-participating person the carrier must provide an ESD to the ACMA by 31 October, declaring that its eligible revenue for the eligible revenue period is less than AUD$25 million.

10. What is a declared or consolidated related party?

A declared related party is defined in section 6 (in relation to a participating person) and section 7 (in relation to a non-participating person) of the Eligible Revenue Determination as an entity that is not a participating person or a consolidated related party of a participating person (or a non-participating person) and:

> is owned at any time during the eligible revenue period by a body that owns the participating person (or non-participating person) and has telecommunications sales revenue in Australia at any time during the eligible revenue period; or

A body owns a declared related party or a participating or non-participating person if the body has company interests of more than 49 per cent. The term ‘body’ has the same meaning as the definition in section 5 of the Eligible Revenue Determination.

A consolidated related party of a participating or non-participating person is defined in section 5 of the Eligible Revenue Determination and is an entity that is not the participating or non-participating person and the revenue of which is included in the annual consolidated financial statements of the ultimate parent entity of a participating or non-participating person.

11. What is an ESD?

An ESD, made in accordance with subsection 4(2) of the Participating Person Determination, is a statutory declaration that is made:

> by

> in the case of a company, a Director or Company Secretary or any person authorised in writing by the company to make the declaration or

> if the person is a natural person ,the person; and

> is made in accordance with the Statutory Declarations Act 1959.

An ESD must:

> declare which of the three revenue thresholds the carrier has met (i.e. only one of the thresholds should be specified);

> specify the eligible revenue period;[6] and

> be submitted to the ACMA by the next
31 October following the end of the eligible revenue period.

Under section 11 of the Statutory Declarations Act 1959, it is an offence to intentionally make a false statement in a statutory declaration.

The ESD must be submitted to the ACMA by 31 October or the carrier will be considered to be a participating person and must provide an Eligible Revenue Submission (refer 3. What does it mean to be a participating person? above for the relevant eligible revenue period.

An ESD template is available on the ACMA Eligible Revenue Portal for a non-participating person.

A carrier who submits an ESD will continue to be subject to all other carrier requirements, including the requirements of the Telco Act.

12. How does a carrier submit an ESD to the ACMA?

A carrier can submit a completed and signed ESD in PDF format to the ACMA by email to .

Alternatively, signed eligible statutory declarations can be mailed to the ACMA, addressed to:

The Manager

Revenue Assurance Team

People and Finance Branch

Australian Communications and Media Authority

PO Box 78

BELCONNEN ACT 2616

All information submitted must be:

> clearly legible;

> in English; and

> any $ amounts must be in Australian dollars (AUD).

13. What happens if an ESD is not submitted by 31 October?

If a carrier determines that it satisfies at least one of three revenue thresholds of the Participating Person Determination (calculated on a group basis where applicable) and does not submit an ESD by 31 October, then the carrier may be a participating person for the preceding eligible revenue period[7] and must provide an ERR (refer 3. What does it mean to be a participating person?) to the ACMA by 31 October.

Failure to provide an Eligible Revenue Submission by 31 October may result in penalties being incurred or other enforcement action applied.

A carrier that is a participating person is liable to pay all levies and charges associated with being a participating person.

A carrier must either:

> submit an ERR to the ACMA by 31 October; or

> submit an ESD to the ACMA by 31 October.

14. What if an ERR was required last year but an ESD can be made this year?

If you meet at least one of the revenue thresholds then you can lodge an ESD. If you lodged an ERR last year as you had earnings that exceeded the revenue thresholds, the ACMA may require further documentation to substantiate the change in revenue e.g. eligible revenue calculations. If this is the case, the ACMA recommends that you provide further documentation to the ACMA prior to the statutory due date so that the ACMA can analyse your claim in time for you to be able to lodge an ERR by the due date and avoid possible penalty.

15. How can I obtain further information?

The ACMA Revenue Assurance Team can be contacted by email on or by phone on +61 02 6219 5355.

July 20151 of 6

[1] An eligible revenue period is the period 1 July to 30 June in relation to the relevant year. A participating person may prepare an ERR form using financial information relating to a different 12 month period (ending prior to 30 June) in accordance with section 12 of the Telecommunications (Eligible Revenue) Determination 2015.

[2] The charge is calculated under the Telecommunications (Carrier Licence Charges) Act 1997 . Non-participating persons will not be liable to pay the annual carrier licence charge if the carrier’s licence was in force at the beginning of a financial year and the carrier was a non-participating person in the preceding eligible revenue period.

[3] An eligible revenue period is the period 1 July to 30 June in relation to the relevant year. A participating person may prepare an ERR form using financial information relating to a different 12 month period (ending prior to 30 June) in accordance with section 12 of the Telecommunications (Eligible Revenue) Determination 2015.

[4] The charge is calculated under the Telecommunications (Carrier Licence Charges) Act 1997 . Non-participating persons will not be liable to pay the annual carrier licence charge if the carrier’s licence was in force at the beginning of a financial year and the carrier was a non-participating person in the preceding eligible revenue period.

[5] Each carrier that has the same ultimate Australian parent entity as one or more other carriers must calculate its eligible revenue on a group basis, accounting for revenue and deductions as a whole.

[6] An eligible revenue period is the period 1 July to 30 June in relation to the relevant year. A participating person may prepare an ERR Form using financial information relating to a different 12 month period (ending prior to 30 June) in accordance with section 12 of the Telecommunications (Eligible Revenue) Determination 2015.

[7] An eligible revenue period is the period 1 July to 30 June in relation to the relevant year. A participating person may prepare an ERR form using financial information relating to a different 12 month period (ending prior to 30 June) in accordance with section 12 of the Telecommunications (Eligible Revenue) Determination 2015.