New laws passed last year made it illegal to manufacture, distribute, possess, use or sell electronic sales suppression tools (ESSTs).
According to the ATO, clients who possess an ESST have until 3 April 2019 to potentially avoid committing an offence or becoming liable to an administrative penalty.
Taxpayers who produce, supply, possess, or incorrectly keep tax records using an ESST, or knowingly assist others to do so can face penalties up to 5,000 penalty units – currently $1,050,000.
ESSTs allow income to be under-reported by: deleting transactions from electronic record-keeping systems, changing transactions to reduce the amount of a sale, misrepresenting a sales record, for example by allowing GST taxable sales to be re-categorised as GST non-taxable sales and falsifying point of sale records.
Clients who possess an ESST and acquired it before 9 May 2017 have been urged to come forward to the ATO before the penalties kick in.
“For any clients who have used an ESST to mispresent or under-report income, we strongly encourage them to make a voluntary disclosure,” said the ATO.
“In either case, your clients will need to contact their point of sale (POS) system provider to remove the ESST.
“If your clients are concerned their POS system may have an ESST, they can check with their POS system provider.”