Digital Tax Reporting Requirements for Businesses

In 2024, the Australian Taxation Office (ATO) has continued to refine its digital tax reporting obligations to keep pace with evolving technology and increase compliance efficiency for businesses. There are a few key points that businesses should remain aware of in terms of digital reporting, particularly with e-invoicing and expanded digital lodgement systems.

E-invoicing Push

E-invoicing has gained traction as the ATO moves towards making it the new standard for invoicing across Australia. The government is actively encouraging businesses to transition to e-invoicing, with talks of making it mandatory for certain sectors in the coming years. E-invoicing allows for the seamless exchange of invoices between buyer and supplier systems, reducing the need for manual entry, cutting down on fraud, and enabling real-time visibility into transactions.

While adoption is still voluntary for many sectors, the push towards standardizing e-invoicing under the ‘Peppol’ framework means businesses should start preparing now. For those already using digital systems, the transition may involve ensuring their software is compliant with the ‘Peppol’ standard. For many of our clients who use Xero, cloud versions of MYOB and Quickbooks, E-invoicing can be enabled. For others, it may require overhauling invoicing practices to remain compliant as mandates roll out.

Digital Lodgement Expansion

On the payroll side, Single Touch Payroll (STP) Phase 2 is now fully in effect, requiring employers to report more detailed payroll information with each pay run. This includes income types, employment conditions, and other additional data points. Ensuring payroll systems are updated and compliant with STP Phase 2 is critical to avoiding penalties.

Beyond payroll, there is also the growing use of myGovID (name to be changed to myID from mid-November 2024), the secure digital identity system required for business owners and tax agents to access the ATO’s online services. Keeping software up-to-date and ensuring proper staff training for digital lodgement processes will minimize disruptions.

Staying compliant with these evolving digital requirements ensures businesses avoid penalties and benefit from more streamlined tax reporting.