Wilfully Destroying Records

– section 56 of the Taxation Administration Act 1997 (Vic)

It is illegal to wilfully damage or destroy records that are required to be kept for taxation purposes.
wilfully destroy records
The charge of Wilfully Destroying Records is dealt with in the Magistrates’ Court.
 
Examples of Wilfully Destroying Records
  • A person deliberately wipes the hard drives of all their business computers in an attempt to destroy company invoices.
  • An officer of a body corporate fails to exercise due diligence and a number of records relevant for taxation purposes are inadvertently destroyed during an office relocation.
  • A person burns all of their taxation documents after receiving notice that they are being audited by the tax office.
What is the legal definition of Wilfully Destroying Records?
The legal definition of the offence Wilfully Destroying Records is ‘A person must not wilfully damage or destroy a record required to be kept by a taxation law’.3

Legislation
The relevant legislation for this offence is section 56 of the Taxation Administration Act 1997 (Vic).

Elements of the offence
There are three separate elements to Wilfully Destroying Records that must all be satisfied for a person to be guilty of the offence. These elements are:

  1. A person damages or destroys a record;
  2. They do so wilfully; and
  3. The record is required to be kept by a taxation law.
Element 1: Damage or destroy a record
The first element of this offence requires a person to damage or destroy a record.

The record need not be completely destroyed. Mere damage to the record is enough to satisfy this element of the offence.

“Can they prove you destroyed the record?”
Element 2: The damage or destruction was wilful
The second element of this offence requires the damage or destruction of a record to be wilful. This means that a person must intend that their actions would result in the damage or destruction of a record.

An exception to this is if the person is an officer of a body corporate. If the person is an officer of a body corporate, they will also satisfy the second element if they fail to exercise due diligence to prevent the damage or destruction of a record.4 An officer of a body corporate has a positive obligation to exercise due diligence to ensure that a record is not damaged or destroyed to avoid satisfying the second element of the offence.

Element 3: The record is required to be kept by a taxation law
The final element of this offence requires the record that was damaged or destroyed was required to be kept by a taxation law.

A record is required to be kept by a taxation law if the record is necessary to enable a person’s tax liability under a taxation law to be properly assessed.5 Additional records may also be required to be kept under taxation law if the Commissioner directs a person to keep additional records specified in written notice.6

A record is not required to be kept under taxation law five years after the later of either (a) the date it was made or obtained; or (b) the date of completion of the transaction or act to which it relates.7
 
  • The damage or destruction of records was not deliberate (lack of intent).
  • The records were not relevant for taxation purposes.
  • The accused was not the person who destroyed or damaged the records.
  • The accused was forced to destroy or damage the records by somebody else (duress).
Questions in cases like this
  • Did the person deliberately damage or destroy records?
  • Were the records relevant for taxation purposes?
  • Was the person an officer of a body corporate? If so, did they exercise due diligence to prevent the commission of the damage or destruction of records?

The maximum penalty for Wilfully Destroying Records for a body corporate is 500 penalty units. As at 1 July 2018, the value of a penalty unit is $161.19.1 As such, the maximum penalty for Wilfully Destroying Records for a body corporate is a $80,595 fine.

The maximum penalty for Wilfully Destroying Records for an individual is 100 penalty units, or a $16,119 fine.

The Department of Treasury and Finance reviews and updates the value of a penalty unit on 1 July each year.2
 
We currently do not have any sentencing info for the offence of Wilfully Destroying Records.
 
Other Important Resources

[1] https://www.legalaid.vic.gov.au/find-legal-answers/fines-and-infringements/penalty-units
[2] http://www.justice.vic.gov.au/home/justice+system/fines+and+penalties/penalties+and+values/
[3] Taxation Administration Act 1997 (Vic) s 56
[4] Taxation Administration Act 1997 (Vic) s 130B
[5] Taxation Administration Act 1997 (Vic) s 50
[6] Taxation Administration Act 1997 (Vic) s 51
[7] Taxation Administration Act 1997 (Vic) s 55