Annual charge exemption scheme: Questions and answers
- ACE interactive tool and process map
- Payment dates for ACE entries that have generated turnover
- Annual Charge Exemption scheme (ACE) forms
The annual charge exemption scheme replaced the low value turnover (LVT) scheme on 1 July 2015. The LVT scheme provided an exemption from annual charges for goods on the ARTG with low sales turnover, and had been in place in various forms since 1990.
The ACE scheme is more equitable, reduces red tape for business and provides administrative efficiencies for TGA. It recognises that TGA's post-market monitoring costs are incurred for products that have been placed into the market and allows sponsors to enter their products on the ARTG in advance of marketing with no annual charge (until turnover commences).
Information about the ACE scheme is outlined below.
- Between 1 July and 22 July (annually) - sponsor must self-declare that entry had $0 turnover in the previous financial year in order to maintain the exemption for each entry. The sponsor may notify the TGA of the commencement of turnover for that entry at any other time during the year. This notification can be made online through the TGA Business Services site or submitted by completing a paper form.
- 15 September (annually) - Due date for payment of annual charges.
About the Annual Charges Exemption scheme (ACE)
The scheme operates in the following way:
- The annual charge exemption (ACE) scheme is a self-declaration scheme. Sponsors must make a declaration before 22 July each year for each entry on the ARTG that has an ACE, to confirm that entry had $0 turnover in the previous financial year. A declaration between 1 July and 22 July will confirm their ACE for the previous financial year and will pre-qualify their ACE for the current financial year.
- Sponsors can apply for a waiver of the annual charge if a public health risk would arise if the entry is removed from the ARTG, and there is no reasonable alternative, and if the product would become financially unviable if an annual charge is paid.
- Sponsors will make a self-declaration of $0 turnover, rather than having to obtain third party certification of turnover.
- Once an ACE entry commences turnover, it will incur an annual charge each year until cancelled from the ARTG.
- The TGA has implemented an online system which allows sponsors to notify the TGA when turnover starts. A notification of turnover can be made at any time during a financial year. If the sponsor does not notify turnover during a financial year, the sponsor will be required to declare an entry was $0 turnover before 22 July in the next financial year. The result of not declaring $0 turnover is that the annual charge for the relevant financial year will become payable.
- Entries on the ARTG before the ACE scheme commenced on 1 July 2015 were assessed for ACE eligibility based on their (previous) LVT exemption and turnover status. Sponsors of such entries were already notified the particulars of those entries and no further pre-1 July 2015 ARTG entries are eligible for the ACE scheme.
- New entries in the ARTG on or after 1 July 2015 automatically pre-qualify for an ACE until an entry first generates turnover. No application or fee is required.
- Sponsors have the option to notify at any time if an ACE entry has commenced turnover. This helps sponsors to avoid the need to pay the annual charges for the previous and current financial years at the same time i.e. 15 September.
- New entries in the ARTG on or after 1 July 2015 automatically pre-qualify for an ACE until the entry first generates turnover. No application or fee is required.
- Self-declaration - sponsors are able to make a self-declaration of $0 turnover, rather than having to obtain third party accountant certification of turnover.
- Sponsors have the option to notify the TGA at any time if an entry has commenced turnover. This will help sponsors avoid incurring multiple year annual charges for the entry in September of the next financial year if turnover commenced in the previous year.
- A provision for waiver of the annual charge exists on the grounds of public health risk/financial viability.
Sponsors are only invoiced for entries which incur annual charges (i.e. non-exempt entries).
An ACE will apply on a financial year (July to June) basis and the sponsor will need to provide a '$0 turnover' declaration by 22 July in the next financial year, until a product first generates turnover, to maintain the exemption.
The annual charge will become payable from the financial year in which the product commences turnover.
A sponsor must declare that turnover has not commenced for each relevant entry between 1 July and 22 July in the next financial year in order to maintain an ACE. (see also: When would I have to notify the TGA that my product has begun making a turnover?) If a declaration is not received turnover will be assumed to have commenced and the annual charge for the prior and current financial year will be raised for payment.
A sponsor can notify the TGA at any time during the year that turnover has commenced.
The declaration can be completed online through the TBS portal; or if you do not have access to TBS, by downloading a 'Declaration of Low Value ($0) Turnover' from the TGA website.
Instructions about how and where to submit a paper-based declaration are set out on the downloadable form.
If completed on time, the declaration will have the combined effect of:
- confirming the 2016-17 ACE on the entry; and,
- pre-qualifying the entry for ACE again in 2017-18.
- Annually. A declaration will have to be made on an annual basis for each entry that qualifies for an ACE. This declaration will have to be made by 22 July each year, for the preceding financial year.
You should notify the TGA as soon as possible after the entry first generates turnover.
If you do not notify TGA then the ACE will cease when no declaration is received in the following July (as part of the annual self-declaration process) and you will then become liable for two annual charges, one for the previous financial year when turnover commenced, and one for the current financial year. The annual charge will then apply for each year until the entry is removed from the ARTG.
You can maintain ACE on an entry if you make a declaration for the entry by 22 July in the next financial year that the product covered by the exemption had no turnover for the previous financial year (e.g. sponsor must declare $0 turnover for the 2016-17 year by 22 July 2017).
- It would be assumed that the product has commenced turnover and the ACE would cease. The annual charge for the previous financial year will become payable, as will the annual charge for the current year. The entry will incur an annual charge each financial year until it is removed from the ARTG.
- No, if you fail to declare $0 turnover in July as part of the annual declaration, it will be assumed that your product no longer qualifies for an ACE and the annual charge will become payable. (see also: What happens if I do not notify the TGA that turnover has begun?)
If you fail to provide a declaration between 1 July and 22 July BUT the entry concerned had not commenced turnover in the previous financial year, under the ACE scheme you will be able to apply for reinstatement of the ACE if:
- you apply by 15 September of that year,
- you provide a self-declaration of $0 turnover, and
- you pay the relevant reinstatement application fee.
If any of the three elements are absent, the reinstatement application will be invalid and the ACE will not be reinstated on the entry.
- Under the Therapeutic Goods Regulations 1990 (section 43AAA), 'turnover' for a therapeutic good means gross dollar receipts (excluding GST) from sales of the good by the sponsor of that good, whether directly or indirectly, in Australia for a financial year.
Low value turnover under the ACE scheme regulations means $0 turnover.
Under the Therapeutic Goods Regulations 1990 (section 43AAA), 'turnover' for a therapeutic good means gross dollar receipts (excluding GST) from sales of the good by the sponsor of that good, whether directly or indirectly, in Australia for a financial year.
ARTG entries that are available in TBS for a declaration of $0 turnover between 1 July and 22 July 2017 will remain on a sponsor's list for selection, even after an entry has been included in a declaration submitted to the TGA and its ACE status confirmed. Please be assured that reselection of the same ARTG entry during that period will not affect its 'exempt' status.
We recognise that a sponsor may need to complete multiple declarations during the declaration period, particularly if their list of ARTG entries they wish to declare as $0 turnover is large.
Note: For 2016-17, you can download a list of your ACE entries to (e.g.) an Excel workbook which you can take away and use to verify against your own records to determine if an entry or entries has commenced turnover).
If so, the sponsor should check any previously submitted declarations in TBS using the 'View Lodged Submissions' menu; then selecting the relevant completed declaration and clicking on the 'Print Preview' icon immediately beside the declaration. This will help to ensure that all ARTG entries that had a $0 turnover in 2016-17 have been included in a declaration that has been submitted to the TGA.
You will be able to apply to the Secretary for a waiver of the annual charge for a registered medicine, a medical device Class IIa and above, an IVD class 2 and above or a biological if:
- it is in the interests of public health for the product to remain on the ARTG; and
- the product would not be financially viable if sponsor is required to pay the charge for that financial year.
For the purpose of considering whether it is in the interest of public health for an entry to remain on the Register, the Secretary must take into account the following matters:
- the population who use the goods;
- the clinical needs of the population who use the goods and the reasonable availability of alternatives to the goods for that population;
- any health risks to the population who use the goods that may be associated with:
- obtaining the goods through alternative means; or
- the use of alternative goods;
- the likelihood of the goods being available through alternative means to the population who use the goods if the person in relation to whom the goods are entered in the Register were to request the Secretary to cancel the entry.
The Secretary would have 60 days to make a decision on the application under the scheme.
If the Secretary granted a waiver and the sponsor requested in that year that the product be removed from the ARTG, the relevant annual charge for that financial year would become payable.
- The sponsor will be able to seek a review of the decision of the delegate not to grant a waiver for the entry under Regulation 48 of the Therapeutic Goods Regulations 1990.
- There is no application fee for applying for a waiver.
- The Secretary has 60 days to make a decision whether to grant a waiver or not. A separate application will need to be submitted for a waiver of the annual charge in each financial year. A waiver will only apply to the financial year in which it was granted.
If your entry is exempt under the ACE scheme, certain details will be published on the TGA website.
If you are given a waiver of annual charges by the Secretary, certain details will be published on the TGA website.
The TGA has an audit and compliance program to verify declarations made by sponsors.
The TGA may at any time, request sponsors to provide further information in relation to an exempt entry in order to verify the entry was/is a $0 turnover product in the period declared by the sponsor.
It is a crime to make a false declaration. If a false declaration of no turnover is made to avoid paying the annual charge, then it would be an offence under the Criminal Code.
If a sponsor is audited and found to have made a declaration that was not true, the sponsor will be liable for the annual charges for the entry from the year in which the false declaration was made.
- To view the ACE notification on the website you need to have a login with the submitter system role for your organisation for the TBS site. If you have a login, please go to the applications tab at the top of the screen and the first option available to you should be the Annual Charge Exemption. Click on this and complete your notification. If you do not have a login with the appropriate system role or do not have a login at all, please contact your organisation administrator to either amend your access or create access for you.
- There are rules around the qualification of ARTG entries for the ACE scheme. If your entries do not appear in this tab, please contact the ACE team on 02 6232 8694 or by email email@example.com to discuss further.
- If you need assistance with any aspects of the ACE scheme you can visit the TGA website and view the ACE page, or contact us via email at ACE.Scheme@health.gov.au or phone us on 02 6232 8694.