Annual charge exemption scheme: Questions and answers

29 June 2018

Key dates

  • 1 July 2015 – ACE scheme commenced
  • Between 1 July and 22 July (each year) - sponsors must self-declare that an ACE entry had $0 turnover in the previous financial year in order to confirm the previous financial year ACE; and continue the ACE on the entry in the current financial year
  • 15 September (annually) - due date for payment of annual charges

About the Annual Charge Exemption (ACE) scheme

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The Annual Charge Exemption (ACE) scheme replaced the low value turnover (LVT) scheme on 1 July 2015. The LVT scheme provided an exemption from annual charges for products on the Australian Register of Therapeutic Goods (ARTG) with low sales turnover, and had been in place in various forms since 1990.

The purpose of the ACE scheme is to recognise that TGA's post-market monitoring costs should only be incurred by products that have been placed into the market. The ACE scheme allows sponsors to include their products on the ARTG in advance of their marketing, without incurring annual charges until the product commences generating turnover.

In order to retain an exemption under the ACE scheme, sponsors are required to make an annual 'self-declaration' (between 1 July and 22 July of a year) to confirm that a product did not commence generating turnover in the previous financial year.

  • New products (i.e. entries) included on the ARTG on or after 1 July 2015 automatically qualify for an Annual Charge Exemption (ACE).
  • Sponsors are not required to make an application or pay a fee in order to obtain an ACE for a new entry included on the ARTG or to retain an ACE for an existing entry on the ARTG.
  • Sponsors are required to make a self-declaration between 1 July and 22 July of each year to confirm that an entry with an ACE, did not commence generating turnover (i.e. had $0 turnover) in the previous financial year. Making a self-declaration between 1 July and 22 July of each year will confirm the ACE on the entry for the previous financial year and will continue the ACE into the new financial year.
  • If a sponsor does not make a declaration of $0 turnover for an ACE entry between 1 July and 22 July of a year, the ACE will automatically cease and the relevant annual charge for that entry will become payable each financial year until the entry is cancelled (i.e. revoked) from the ARTG.
  • Where an ACE entry is cancelled (i.e. revoked) from the ARTG during a financial year and the entry did not commence generating turnover prior to being cancelled, the sponsor is still required to make a declaration of $0 turnover between 1 July and 22 July of the following financial year, but only if the entry had not commenced generating turnover before it was cancelled from the ARTG.
  • Sponsors are only invoiced for entries which incur annual charges (i.e. entries which are not exempt under the ACE scheme).
  • Once an ACE entry commences generating turnover, the entry is no longer eligible for an ACE in any future financial year, even if the entry does not generate any turnover in a future financial year.
  • A notification of turnover can be made at any time during a financial year.
  • Annual charges become payable from the financial year in which the entry commenced generating turnover and will continue to be payable each financial year until the entry is cancelled (i.e. revoked) from the ARTG.
  • Annual charges are payable by 15 September each year.
  • An application may be made for waiver of an annual charge on the grounds of public health risk / financial viability. Waivers are only granted under exceptional circumstances.
  • Sponsors are not required to obtain third party certification of turnover (e.g. a third party, qualified accountant).
  • Entries that were active 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 notified the particulars of those entries and no further pre-1 July 2015 ARTG entries are eligible for the ACE scheme.

'Turnover' for a therapeutic good means "gross amount (in dollars) received (excluding GST) from sales (whether direct or indirect) of the goods in Australia by the person for the financial year".

Under regulation 43AAA of the Therapeutic Goods Regulations 1990, "a person's turnover of therapeutic goods for a financial year is of low value if the turnover is $0".

Therefore, if an ACE entry commences generating turnover which is greater than $0, it is no longer eligible for exemption under the ACE scheme.

An ACE is valid for a single financial year (1 July to 30 June).

To retain an ACE, sponsors must make a declaration of $0 turnover between 1 July and 22 July of each year, until the entry commences generating turnover.

The policy which applies to transfers of sponsorship is that 'the ACE follows the entry'.

This is to ensure that any sponsor who receives an entry by a transfer of sponsorship is not affected (positively or negatively) upon receiving the entry. If an entry is ACE when transferred, the ACE continues on the entry (under the new sponsor) until: the entry commences turnover and the sponsor notifies us that turnover; or, the sponsor does not provide a declaration of $0 turnover between 1 July and 22 July in the next financial year.

Importantly, if an ACE entry is transferred to another sponsor during a financial year, the sponsor who 'acquired' the ACE entry is responsible for making the declaration of $0 turnover between (the next) 1 July and 22 July.

Before the declaration of $0 turnover can be made, the sponsor who acquired the ACE entry must obtain evidence from the sponsor who relinquished or 'disposed' the ACE entry, to confirm whether (or not) the entry did not commence generating turnover during the financial year in which the entry was transferred.

Example

Sponsor A transfers an entry in a financial year that currently has an exemption under the ACE scheme, to Sponsor B on 1 January of that year (i.e. the mid-way point of the financial year). As the ACE follows the entry, Sponsor B becomes responsible for making a declaration of $0 turnover for the entry between the (next) 1 July and 22 July.

As only the new sponsor (Sponsor B) is responsible for giving the declaration, the declaration must be made on the entry for the full financial year when the transfer occurred. This means that Sponsor B will need to confirm with Sponsor A that: the entry had not commenced generating turnover between 1 July and 31 December while under Sponsor A's ownership; and must also confirm themselves that the entry did not commence turnover between 1 January and 30 June while under their (Sponsor B's) ownership.

Importantly, Sponsor B should be always mindful that it is an offence under the Criminal Code to give a false or misleading declaration; and therefore should seek reasonable assurances and evidence from Sponsor A (ideally, as part of the transfer of sponsorship process) whether the entry was $0 turnover (or not) while under Sponsor A; so that Sponsor B can give a qualified declaration of $0 turnover for the entry in the next declaration period between 1 July and 22 July.

Certain details about the entries that are exempt under the ACE scheme are published on the TGA website under subsection 61(5C) of the Therapeutic Goods Act 1989 which authorises the publication of kinds of therapeutic goods information relating to exemptions under the Annual Charge Exemption Scheme.

Declaring $0 turnover

A declaration of $0 turnover confirms that an entry which was exempt from paying annual charges for a financial year did not commence generating turnover during that financial year.

In making a declaration of $0 turnover, the sponsor is:

  1. confirming the previous financial year's exemption and
  2. confirming the exemption should carry forward into the next financial year.

A declaration of $0 turnover is made annually between 1 July and 22 July of a year.

NOTE: Declarations cannot be made prior to 1 July or after 22 July of a year.

A declaration of $0 turnover can be made online (between 1 July and 22 July only) through the TGA Business Services (TBS) portal on the TGA website. If you do not have a TBS account, please contact the TBS Helpdesk by email to ebs@health.gov.au.

To make a declaration of $0 turnover through the TBS portal (go to 'Applications / Annual Charge Exemption / Manage My Entries'), you must have the 'submitter' system role assigned to you for your organisation. If you do not have a login with the appropriate system role, please contact your organisation's administrator to either create or amend your access. If you require assistance, please contact the TBS Helpdesk by email to ebs@health.gov.au.

NOTE: Only ACE entries will appear in TBS under 'Manage My Entries'. If you have any queries, please contact the ACE Scheme by email to ace.scheme@health.gov.au. Please ensure you quote your TGA Client ID number and/or the relevant ARTG number(s).

If you are unable to access the TBS portal, you can submit a paper-based notification. The paper-based 'Declaration of Low Value ($0) Turnover' form is ONLY available for download from the TGA website between 1 July and 22 July. Paper-based notifications can be submitted by email to ace.scheme@health.gov.au and must be received no later than 22 July.

Annually, between 1 July and 22 July of a year. Sponsors are required to make a declaration of $0 turnover on an annual basis to confirm (retrospectively) that an ACE entry has not commenced generating turnover during the previous financial year.

If an ACE entry was cancelled (i.e. revoked) from the ARTG during a financial year, once the sponsor has made a final declaration of $0 turnover, no further action will be required by the sponsor for that entry in future financial years.

Once a declaration of $0 turnover has been made, the exemption for that entry will carry forward into the next financial year. The ACE entry will not incur annual charges for the previous or current financial year.

There are no penalties for failing to make a declaration however, if a sponsor does not declare that an ACE entry did not commence generating turnover in the previous financial year, the assumption is made that turnover has commenced and the ACE would therefore cease. As a result, the entry will incur an annual charge each financial year, commencing from the previous financial year, until it is cancelled (i.e. revoked) from the ARTG.

Payment of both annual charge invoices (i.e. the previous financial year's annual charge as the first year in which turnover is assumed to have commenced and the current financial year's annual charge) are due by 15 September of the year in which they are issued.

The entry will continue to incur an annual charge each (next) 1 July thereafter, until the entry is cancelled (i.e. revoked) from the ARTG.

If the sponsor fails to make a declaration between 1 July and 22 July of a year and the ACE entry did not commence generating turnover in the previous financial year, the sponsor can apply to have the exemption reinstated.

A sponsor can only apply for the reinstatement of an ACE between 23 July and 15 September of that year.

The paper-based reinstatement form is ONLY available for download from the TGA website between 23 July and 15 September.

To apply for a reinstatement, the sponsor must:

NOTE: In accordance with legislation, applications forms and/or application fees received AFTER 15 September cannot be accepted.

Notifying that turnover has commenced

A notification of turnover confirms that your entry has commenced generating turnover. Once an ACE entry commences generating turnover, the ACE will cease and the annual charge for the entry will become payable from the financial year in which the turnover commenced. The entry will incur an annual charge each financial year thereafter, until the entry is cancelled (i.e. revoked) from the ARTG.

Once the ACE has ceased for an entry, the ACE cannot be restored against the entry, even if the entry does not generate turnover in a future financial year.

By making a notification of turnover, the sponsor eliminates the requirement to provide an annual declaration of $0 turnover which confirms an entry has not yet commenced generating turnover.

Sponsors can make a notification of turnover at any time during a financial year (except during the declaration period of 1 July to 22 July inclusive). Sponsors are therefore encouraged to make a notification of turnover as soon as possible after an ACE entry commences generating turnover.

Sponsors can submit a notification of turnover online at any time during the financial year (except during the declaration period of 1 July and 22 July inclusive) through the TGA Business Services (TBS) portal on the TGA website. If you do not have a TBS account, please contact the TBS Helpdesk by email to ebs@health.gov.au.

To submit a notification of turnover through the TBS portal (go to 'Applications / Annual Charge Exemption / Manage My Entries'), you must have the 'submitter' system role assigned to you for your organisation. If you do not have a login with the appropriate system role, please contact your organisation administrator to either create or amend your access. If you require assistance, please contact the TBS Helpdesk by email to ebs@health.gov.au.

NOTE: Only ACE entries will appear in TBS under 'Manage My Entries'. If you have any queries, please contact the ACE Scheme by email to ace.scheme@health.gov.au. Please ensure you quote your TGA Client ID number and/or the relevant ARTG number(s).

If you are unable to access the TBS portal, you can submit a paper-based notification. The paper-based 'Notification of Turnover' form is available for download from the TGA website at any time during the financial year, (except during the declaration period of 1 July and 22 July inclusive). Paper-based notifications can be submitted by email to ace.scheme@health.gov.au.

Once a notification of turnover has been made for an entry, the ACE will cease. Annual charges for that entry will become payable from the financial year in which the turnover commenced and the entry will continue to incur an annual charge each financial year thereafter, until the entry is cancelled (i.e. revoked) from the ARTG.

The annual charge invoice will be issued in the month after the notification is made.

Once the ACE has ceased for an entry, the ACE cannot be restored against the entry, even if the entry does not generate turnover in a future financial year.

By making a notification of turnover, the sponsor eliminates the requirement to provide an annual declaration of $0 turnover which confirms an entry has not yet commenced generating turnover.

If a sponsor elects not to make a notification of turnover during the financial year in which the entry commenced generating turnover, then the sponsor is not required to make a declaration of $0 turnover between 1 July and 22 July of a year.

On 23 July of a year, where the sponsor has not made a declaration of $0 turnover, the ACE will automatically cease and the sponsor will be issued with annual charge invoices for two financial years at the same time (i.e. the previous financial year's annual charge as the first year in which the entry commenced generating turnover, and the current financial year's annual charge).

Payment of both annual charge invoices are due by 15 September of the year in which they are issued.

The entry will incur annual charges in August of each financial year thereafter, until the entry is cancelled (i.e. revoked) from the ARTG.

Waivers

A waiver will effectively cancel or reverse the annual charge that would otherwise be payable for a financial year. Sponsors of certain high risk therapeutic goods can seek a waiver from (payment of) an annual charge for the relevant financial year if:

  • the good is not already exempt from paying an annual charge for the relevant financial year (i.e. the entry does not have an ACE);
  • it is not financially viable for the good to remain on the ARTG if the annual charge was payable; AND
  • it is in the interest of public health for the good to remain on the ARTG.

The objective of the waiver provisions is to ensure the continued availability of essential therapeutic goods to the Australian public. The Secretary (decision maker) will only grant a waiver in exceptional circumstances.

Detailed information is available in the ACE scheme waiver guidance.

Sponsors of new goods included on the ARTG:

  • If an annual charge for a therapeutic good is payable for the financial year that it was first included on the ARTG, an application for a waiver must be made before 31 December in the next financial year.

NOTE: A waiver is only relevant if the sponsor is liable to pay the annual charge in relation to that financial year; that is, the sponsor of the therapeutic good has notified the TGA that turnover has commenced, therefore the good is no longer exempt from annual charges under the ACE scheme.

Sponsors of existing goods included on the ARTG:

  • Where the therapeutic good was already included on the ARTG on the first day of the financial year to which the annual charge relates, and the sponsor would otherwise be liable to pay the annual charge for that good, an application for a waiver must be made during that financial year.

A waiver only applies for a single financial year and only applies to the annual charge issued for the financial year in which the waiver was granted.

Any waiver that was granted in a previous financial year will no longer apply in the next financial year. The sponsor will be required to make a new application each financial year.

Sponsors must make an application for waiver in writing. The application must address both the financial viability and public health criteria referred to in the ACE scheme waiver guidance and also meet specific evidence requirements.

Sponsors can include more than one ARTG entry and entries for different types of therapeutic goods in the one application. However, the information required (i.e. evidence requirements) must be provided in relation to each entry.

When making an application, the sponsor must ensure that:

  • all the information you wish the Secretary (decision maker) to consider that is relevant to the criteria (i.e. evidence requirements), has been provided in support of the application;
  • the Chief Financial Officer or equivalent within your company, has signed the application;
  • all the relevant entries for which the application is being made, are listed in the application (per the evidence requirements, the list must include the ARTG number, the ARTG entry description, the annual charge invoice number and the type of therapeutic good); and
  • an email address is provided to ensure you are notified of the Secretary's decision

NOTE: An application for waiver will only be assessed if it addresses the requirements set out in the Regulations. That is, sub regulations 43AAH(7) and 43AAH(8) as described in the evidence requirements. If the application does not properly address the requirements, the application will not be considered.

Where the information provided in an application is assessed as being incomplete, insufficient or incorrect and therefore does not address the criteria and evidence requirements, the application will not be considered on the basis it is not an 'application'.

An application that does not contain sufficient information or sufficiently persuasive information to satisfy the Secretary (decision maker) that it is in the interests of public health for the entry to remain on the ARTG and that it would not be financially viable if the sponsor were required to pay the annual charge, may result in refusal of the waiver.

There is no fee associated with applying for a waiver.

The Secretary (decision maker) has 60 days from the date upon which the application for waiver is received, to consider the application and make a decision on whether or not to grant a waiver.

Written notice of the Secretary's decision, setting out the reasons for the decision, will be issued by email (to the email address provided in the application) as soon as practicable after the decision is made.

If the Secretary decides not to grant a waiver, the annual charge for the relevant financial year will become payable. The written notice of the Secretary's decision will specify the date upon which the annual charge becomes payable.

The written notice of the Secretary's decision will state that you can, within 90 days after the decision comes to your notice, make a request for a review of the Secretary's decision not to grant a waiver, under regulation 48 of the Therapeutic Goods Regulations 1990. Further information and guidance for requesting a reconsideration is available on the TGA website.

If the Secretary (decision maker) granted a waiver for an entry and the sponsor subsequently requests that entry be cancelled (i.e. revoked) from the ARTG in the same financial year, the annual charge for that financial year would become payable.

Certain information about waivers that have been refused or granted will be published on the TGA website. Information will also be published about sponsors who, having been granted a waiver, are required to pay the annual charge because of a request they subsequently made to cancel the entry.

Compliance monitoring

To ensure self-declarations made by sponsors are true and accurate, the TGA may at any time, request sponsors to provide further information in relation to an exemption in order to verify that an entry was/is of $0 turnover for the period declared by the sponsor.

All ACE entries will be published on the TGA website. Therefore, it is sponsor's responsibility to ensure information they provide about the turnover of the product covered by an ACE entry is correct.

Sponsors are reminded that making a false or misleading declaration of $0 turnover is an offence under the Criminal Code.

Should the TGA become aware of the sponsor having made a false or misleading declaration of $0 turnover, the sponsor will be liable for the relevant financial years' annual charges, commencing from the year in which the false or misleading declaration of $0 turnover was made.

Contact us

If you were unable to resolve your query by reviewing information about the ACE Scheme on the TGA website, you can contact the ACE Scheme by email to ace.scheme@health.gov.au or by phone on 02 6232 8694.

Version history

Version history
Version Description of change Author Effective date
V1.0 Original publication TGA May 2015
V1.1 Minor updates TGA June 2015
V2.0 Two Q&A added to General information TGA August 2015
V2.1 Minor updates TGA July 2016
V2.2 Minor updates TGA November 2016
V3.0 Updated TGA June 2017
V4.0 Updated TGA June 2018