Australian Transaction Reports and Analysis Centre Industry Contribution Determination 2022 (No. 1)

This Determination is a legislative instrument made by the Minister for Home Affairs under subsection 9(1) of the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011. It sets the amount of the instalment of levy payable by leviable entities for the financial year beginning on 1 July 2021. The levy is the industry contribution that funds the operations of the Australian Transaction Reports and Analysis Centre (AUSTRAC), which is Australia’s financial intelligence agency responsible for administering the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act). The Determination prescribes a two-element formula for calculating the instalment: an earnings component and a transaction reporting component. The earnings component is 0.048 per cent of the entity’s earnings (as defined, using PBTDA for authorised deposit-taking institutions and registered financial corporations, and EBITDA for others), subject to a $100 million earnings threshold below which the component is nil, and a $5 million cap per leviable entity (or per group member where the entity belongs to a group). The transaction reporting component is based on the number and value of certain reports (called leviable reports) the entity gave to AUSTRAC during the 2020 calendar year, charged at 1.4 cents per report plus a percentage of the value of the report (0.00070301 per cent if the entity’s total report value is below $15 billion, or 0.00092328 per cent if $15 billion or more). There is a $14 million cap on the transaction reporting component for each entity. The Determination also imposes a payment threshold of $1,100: if the calculated amount is less than that, the instalment is nil. Additionally, it provides for a maximum payment amount of $11,480,616.08 for entities (or groups) with earnings above $5 billion. Several categories of entities are exempted from the levy entirely: remittance affiliates that only provide designated services in that capacity (and not in any other capacity), entities that on the census day were a ‘Market Generator’ under the National Electricity Rules, and bodies corporate established for a public purpose by a Commonwealth Act. The Determination is specific to one financial year; it does not replace or amend the Act itself, and separate determinations are made for subsequent years.

The central mechanism is the levy instalment, which is the amount payable for the 2021-22 financial year under section 9 of the Act. The Act defines a leviable entity broadly as a person who is required to be enrolled on the roll of reporting entities maintained by the AUSTRAC CEO under section 51C of the AML/CTF Act. This Determination does not redefine that concept but uses it by reference. Earnings is defined separately for different types of entities. For an authorised deposit-taking institution or a registered financial corporation, earnings means total profit before tax, depreciation and amortisation (PBTDA), not adjusted for significant items. For any other leviable entity, earnings means total earnings before tax, interest, depreciation and amortisation (EBITDA), also not adjusted for significant items. If a leviable entity is part of a group of leviable entities (all leviable entities that are related bodies corporate) and any member of the group is an ADI or registered financial corporation, then earnings for all members is calculated as PBTDA. This ensures consistent treatment within a group. For foreign companies or subsidiaries of foreign companies, only earnings derived from Australian operations are considered.

The leviable report is the other key input to the formula. It comprises reports given to the AUSTRAC CEO during the 2020 calendar year under subsections 43(2) or 45(2) of the AML/CTF Act - which typically cover suspicious matter reports and threshold transaction reports. It also includes such reports given by a remittance affiliate of the entity, or by another entity whose business was acquired by the reporting entity before the census day. The transaction reporting component is computed as the sum of two fees: a flat per-report fee of 1.4 cents, plus a percentage of the value of each report. The percentage applied depends on the total value of all the entity’s leviable reports in 2020: if the total is less than $15 billion, the rate is 0.00070301 per cent; if $15 billion or more, the rate rises to 0.00092328 per cent. There is a cap of $14 million on the total transaction reporting component per entity regardless of the tier. The census day for the financial year is a term defined in the Act, and it determines the point in time at which the entity’s status (e.g., whether it is a market generator) is assessed. The previous financial year is the year beginning 1 July 2020.

The earnings component has a threshold: if the entity (or group) has earnings less than $100 million, the earnings component is nil. It also has a cap: if the calculated earnings component exceeds $5 million, it is reduced to $5 million (for a single entity) or $5 million divided by the number of entities in a group. The overall instalment formula adds the two components. A de minimis threshold of $1,100 means entities whose calculated amount falls below that pay nothing. For the largest entities, a maximum payment amount applies: $11,480,616.08 for entities with earnings greater than $5 billion, or that sum divided by the number of entities in the group if the group’s total earnings exceed $5 billion. The exemptions are specific: remittance affiliates operating only as part of a remittance network (items 31, 32, 32A of the AML/CTF Act’s designated services table) and not in any other capacity; entities that on the census day were ‘Market Generators’ under the National Electricity Rules; and bodies corporate established for a public purpose by a Commonwealth Act. These exemptions set the levy to zero for those entities.

The Determination directly affects every leviable entity that carries on a business in Australia and provides designated services under the AML/CTF Act. This includes banks, credit unions, building societies (all ADIs), registered financial corporations, remittance service providers, casinos, gambling services, bullion dealers, and any other business that handles transfers of value and is required to report to AUSTRAC. The levy is an industry contribution to fund AUSTRAC’s regulatory activities, so the cost is borne by the regulated sector. Entities with small earnings or low transaction volumes may be shielded by the $100 million earnings threshold and the $1,100 payment threshold. However, those thresholds are not indexed, so inflation may gradually bring more small entities into the paying category. The $100 million earnings threshold applies to the earnings component alone; if an entity has earnings of $90 million, its earnings component is nil, but it could still face a transaction reporting component. Conversely, an entity with high transaction volumes but low earnings may still pay significantly through the transaction component.

The grouping rules mean that related bodies corporate that are all leviable entities are treated as a single economic unit for both the earnings component (total group earnings divided equally among members) and the maximum payment threshold. This reduces the compliance burden for groups because they must calculate the levy across the group, but it also means that a large group with many small subsidiaries does not get multiple small caps; the caps are divided by the number of entities. Entities that are foreign companies or subsidiaries of foreign companies are affected only on their Australian-sourced earnings. This prevents the levy from taxing overseas profits but also imposes a record-keeping requirement to isolate Australian results.

The exemptions carve out specific categories. Remittance affiliates (e.g., small money transfer agents that operate under a larger provider’s network) are exempt only if they provide no designated services outside that affiliate capacity. If they also offer other services (e.g., acting as a bank), they lose the exemption. This creates a boundary-drawing problem for entities that operate in multiple capacities. The market generator exemption benefits certain energy market participants, but only if they fall within the precise definition in the National Electricity Rules. The public-purpose body exemption covers entities like government-owned corporations established by Commonwealth legislation; it does not extend to state government bodies (unless they are Commonwealth bodies). The $11.48 million maximum payment affects the very largest financial institutions - those with earnings above $5 billion - and caps their levy. Since the maximum is not indexed, over time more entities may hit the cap as earnings grow, increasing the relative burden on mid-sized entities that fall below the cap.

The primary duty imposed by this Determination is to pay the levy instalment in the amount calculated according to the prescribed formula. The Determination itself does not set the due date or the method of payment; those details come from the Act or from AUSTRAC’s administrative processes. Entities must therefore ensure they are aware of the payment schedule and any other procedural requirements under the Act. The right to pay nil arises if the calculated amount is less than $1,100, or if the entity qualifies for an exemption. Entities also have a right to the application of the caps (earnings component cap of $5 million, transaction component cap of $14 million, and the overall maximum payment cap of $11.48 million). For groups, the caps are divided equally among the members; an entity in a group cannot claim a full cap individually.

The Determination does not impose new reporting duties, but it relies on data that entities are already required to provide under the AML/CTF Act. Entities have a duty to ensure that their earnings information recorded in the roll (maintained under section 51C of the AML/CTF Act) is accurate, and that their leviable reports given in the 2020 calendar year are correctly reported. An error in either baseline could lead to an incorrect levy calculation, either overpayment or underpayment. While the Determination does not create a right to a refund or amendment, the Act likely contains provisions for reassessment or objection. Entities may also have a right to request a review of whether they are correctly classified as a leviable entity, whether they fall within the definition of a group, or whether an exemption applies.

The exemption provisions create rights that must be claimed, or at least verified. A remittance affiliate that provides services only in that capacity is entitled to a nil levy, but the entity must be able to demonstrate that it has not and does not provide designated services in any other capacity. The market generator exemption depends on status on the census day. A body corporate established for a public purpose by a Commonwealth Act must be able to point to its constituent Act. These are likely self-assessment matters, but AUSTRAC may audit claims. Entities that acquire another business must account for leviable reports given by the acquired entity before the census day; those reports can be used only by the acquiring entity, not also by the acquired entity if it continues to exist. This is a right to include those reports, but also a duty to ensure no double counting.

The Determination does not itself create any penalties or enforcement mechanisms. Those are found in the Act and possibly in the AML/CTF Act and general Commonwealth penalty law. The levy instalment, once properly calculated, becomes a debt due to the Commonwealth. Failure to pay on time would likely attract the general interest charge regime under the Taxation Administration Act 1953 (by reference to the Act’s provisions). In addition, the Act may impose administrative penalties for late payment or for providing false or misleading information in relation to the earnings data or report data that underpin the calculation. Since the Determination incorporates data from reports given under the AML/CTF Act, any failure to give those reports or giving false reports is separately enforceable under that Act, which carries substantial civil and criminal penalties.

Entities that underpay because they misstate earnings or exclude reportable transactions risk both penalty for the levy and penalty for the underlying AML/CTF Act breach. The Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 is not available in the source, but it is reasonable to assume it contains provisions for the recovery of unpaid levy, including garnishee notices, court proceedings, and the imposition of penalties for evasion. The Determination’s thresholds and caps mean that borderline cases (e.g., earnings just above $100 million or transaction value just above $15 billion) require precise calculation; a marginal difference can have a disproportionate effect on the amount payable. If an entity makes a good-faith error, the Act may allow for remission or waiver, but the Determination does not address that. The enforcement risk is concentrated on larger entities because their levy amounts are significant, and AUSTRAC has an incentive to audit the largest contributors to verify earnings and transaction data. Smaller entities that fall under the $1,100 threshold face minimal enforcement risk because they pay nothing, but they still must comply with the underlying AML/CTF Act reporting obligations.

The public-purpose body exemption is absolute, but if an entity claims that exemption incorrectly (e.g., it is not established by a Commonwealth Act but by a state Act), it could face a claim for the unpaid levy plus penalties. Similarly, a market generator exemption is tied to a specific definition in the National Electricity Rules; an entity that is not a Market Generator on the census day but claims otherwise may be liable. The Determination does not provide any transitional provisions or amnesty; the levy for 2021-22 is fixed.

This Determination is made under the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 (the Act). The Act sets out the overarching framework: the levy is payable by leviable entities; the amount may be set by determination; the determination may prescribe different amounts for different classes or different financial years. The Determination interacts closely with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Key concepts such as leviable entity, ADI, AUSTRAC CEO, remittance affiliate, and the form of reports are all derived from the AML/CTF Act. The Determination relies on reports given under subsections 43(2) and 45(2) of the AML/CTF Act (suspicious matter reports and threshold transaction reports). It also relies on the roll maintained under section 51C of the AML/CTF Act for earnings data. Therefore, any amendment to those provisions of the AML/CTF Act could affect the calculation under this Determination, even though the Determination itself is not amended. For example, if the definition of a report changes, then what counts as a leviable report for this Determination could change.

The Determination refers to the Corporations Act 2001 for definitions of related bodies corporate, foreign company, and subsidiary. This means that the corporate group structure is determined by the ordinary corporate law tests, which affect how the levy is shared among group entities. The Financial Sector (Collection of Data) Act 2001 defines registered financial corporation as registered entity under that Act, which then determines which earnings measure applies. The National Electricity Rules (made under the National Electricity Law of South Australia) are invoked to define a market generator. This creates a cross-jurisdictional link to energy regulation. The Determination does not interact with tax laws directly, but the levy itself is an expense that would be deductible under ordinary principles (as a cost of carrying on business). The levy is not a tax for constitutional purposes, but it is an industry contribution. It may interact with state franchise fees or other regulatory charges, but no specific interrelationship is stated.

Because the Determination is for a single financial year, it is replaced by subsequent determinations for later years. The Act may require a new determination each year, or at least as often as the Minister decides. This Determination does not affect the operation of the Act itself, and if the Act is repealed or amended, this Determination would cease to have effect or be interpreted accordingly. The Determination does not create any rights or obligations enforceable by third parties; it only governs the levy payable to the Commonwealth.

This Determination was made on 1 March 2022 by the then Minister for Home Affairs, Karen Andrews, and commenced on the day after registration (presumably a date in early March 2022). There is no indication in the source that this Determination has been amended. As a legislative instrument, it could have been amended by a subsequent determination or by a variation under the Act, but none is recorded in the text provided. Typically, AUSTRAC industry contribution determinations are made annually, and the 2022 (No. 1) Determination is the instrument for the 2021-22 financial year. Later determinations (e.g., 2023 (No. 1)) would replace it for later periods. The Determination itself contains no savings or transitional provisions that preserve its operation for earlier periods. Therefore, its effect is spent once the 2021-22 financial year ends and any instalment due has been paid or collected. The Determination does not amend any other legislative instrument and is not itself a consolidation. If any error were discovered in the Determination, the Minister could have made an amending determination, but no such amendment is referenced in the source. The absence of an amendment history may be because the instrument was left in its original form for its entire operative period.

The source does not contain any reference to litigation, and as a ministerial determination with a short lifespan, it is unlikely to have been the subject of judicial consideration. The underlying Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 may have been challenged on constitutional grounds or in the context of administrative law, but no such case is mentioned. The Determination itself is a formulaic instrument that leaves little discretion: the Minister prescribes the amounts and formulas, and the entity calculates its liability. Challenges could arise if an entity disputes the calculation (e.g., whether it is a leviable entity or how its earnings are determined), but that would likely involve the Act’s provisions rather than the Determination alone. There have been no reported cases on this specific Determination. The lack of litigation history does not mean no disputes occurred; they may have been resolved internally or through the Administrative Appeals Tribunal without public record. The Determination is now historical (for the 2021-22 year), so future litigation would be rare unless a dispute about past liability surfaces. The precise definitions and caps are detailed enough that they could be the subject of interpretive debate, but no such debate appears in published decisions.

Several features of the Determination could catch unwary entities. First, the earnings definition distinguishes between ADIs/registered financial corporations and others, but within a group, if any member is an ADI or registered financial corporation, the entire group uses PBTDA for all members. An entity that is not itself an ADI could be pulled into a different earnings measure because of its group’s composition. For example, a non-ADI subsidiary of a bank would have its earnings measured as PBTDA rather than EBITDA, which could increase the earnings component because PBTDA excludes interest expense. Second, the transaction reporting component uses data from the 2020 calendar year, not the previous financial year. This means an entity that significantly grew its transaction volume between 2020 and 2021 would be paying a levy based on stale figures, potentially lower than its current size warrants. Conversely, a shrinking entity might pay based on higher historic volumes. The two-tier rate for transaction reporting also creates a cliff: an entity with $14.9 billion in total report value pays the lower rate (0.00070301%) while an entity with exactly $15 billion pays the higher rate (0.00092328%). This can produce a substantial jump in levy for a small increase in report value, with no taper. The $14 million cap on the transaction component mitigates the cliff for very large entities, but not for those just above $15 billion whose transaction component is below the cap.

Third, the exemption for remittance affiliates is available only if the entity provides designated services only in the capacity of a remittance affiliate. If it also provides any other designated service (e.g., as a bank, a bullion dealer, or even another remittance service not part of the network), the exemption is lost entirely for the whole levy, not just for the services outside the affiliate. This can create a perverse incentive for a small remittance affiliate to avoid offering any other product, even if commercially sensible. Fourth, the market generator exemption is tied to the National Electricity Rules definition as at the census day. The Rules may be amended, and the entity must check its status on that specific day. An entity that becomes a market generator after the census day does not qualify for the exemption for that year. Fifth, the acquired business provision allows an acquiring entity to count leviable reports given by the acquired entity before the census day. However, the acquired entity, if it remains a separate leviable entity after acquisition, cannot also count those same reports. This requires careful tracking to avoid double counting and also to ensure that reports given by a business that was acquired during the 2020 calendar year are attributed to the correct entity. Sixth, the $1,100 payment threshold applies to the total calculated amount before considering exemptions? The text states: if the amount calculated under subitem (2) is less than $1,100, the instalment is nil. That calculation includes both components. So entities with small operations may still have to compute both components to see if they exceed the threshold. The threshold is not indexed, so over time more entities may exceed it. Seventh, for groups, the maximum payment amount of $11,480,616.08 is divided by the number of leviable entities in the group. If a group has many members (e.g., 20 subsidiaries), each subsidiary’s maximum is only ~$574,000, so the total group levy can be much lower than the single-entity cap. This favours groups with many entities, but only if each entity’s earnings are high enough to trigger the cap. Conversely, a single large entity pays the full cap.

Compliance begins with correctly identifying whether the entity is a leviable entity under the Act. That requires checking that it is enrolled on the AUSTRAC roll. Entities that provide designated services under the AML/CTF Act are generally reporting entities and thus leviable entities. The next step is to gather the two sets of data: earnings for a year ending in the previous financial year (2020-21) and leviable reports given in the 2020 calendar year. For earnings, entities must obtain the figure from their financial statements: PBTDA for ADIs and registered financial corporations (and groups containing them), EBITDA for all others. The earnings must be the total profit or earnings not adjusted for significant items. For foreign companies or subsidiaries, only Australian-sourced earnings count. Entities should reconcile these figures with the information they have provided to AUSTRAC for the roll, as the roll likely contains earnings data that AUSTRAC will use to verify the levy calculation. If there is a discrepancy, the entity may need to correct the roll.

For the transaction reporting component, entities must compile a list of leviable reports given between 1 January 2020 and 31 December 2020. This includes reports under subsections 43(2) and 45(2) of the AML/CTF Act (suspicious matter reports and threshold transaction reports). It also includes reports given by remittance affiliates of the entity, and reports given by an entity whose business was acquired before the census day (which is defined in the Act, but likely 1 July 2021). Entities should ensure they have a record of all such reports and their value. The value of a report is the value of the transaction to which it relates. For suspicious matter reports, the transaction value may be approximate or aggregated; entities must use a reasonable method to determine the value. The total number and total value of reports will then be used in the formula.

Entities that are part of a group must coordinate with related bodies corporate to determine the group’s total earnings and the number of leviable entities in the group. The earnings component is then calculated as 0.048% of total group earnings, divided equally among group members. Each entity then separately calculates its own transaction reporting component, but with an important rule: if a leviable report is used by one entity (e.g., a report given by an acquired entity or a remittance affiliate), it cannot be used by another entity. Groups must therefore assign ownership of reports to avoid double counting.

After calculating both components and summing them, the entity checks the payment threshold: if the total is less than $1,100, the instalment is nil. If it is above, the entity then checks whether it qualifies for any exemption (remittance affiliate, market generator, public-purpose body). If exempt, the instalment is nil regardless of the calculation. If not exempt, the entity applies the caps: the earnings component is capped at $5 million (or $5 million divided by group size); the transaction reporting component is capped at $14 million; and the overall instalment is capped at $11,480,616.08 (or that amount divided by group size) if earnings exceed $5 billion. The entity should then pay the resulting amount by the due date specified by AUSTRAC or the Act. Record-keeping is essential to support the calculation in case of audit. Entities should also monitor subsequent determinations for future years, as the rates, thresholds, and caps may change.