GST Matters – recent news
|BAS Statements||Hotel Accommodation||GST on tampons|
|Property Sales||Low Value Imports||Digital Imports|
|Non-resident businesses||Uber loses in court||Barter transactions|
|Bitcoin||Charities||GST and Property|
|GST and intangibles|
The ATO has released guidance in the form of GSTR 2019/1 Goods and services tax: supply of anything other than goods or real property connected with the indirect tax zone (Australia).
Draft legislation has been released which would remove an exclusion from the $75,000 GST minimum turnover test for the offshore sales of hotel accommodation in Australia. The amendments would bring such sales into the Australian GST net from 1 July 2019.
Announced in the 2018 Budget, from 1 July 2019 offshore sellers of hotel accommodation in Australia will be required to calculate their GST turnover in the same way as local sellers. Currently offshore sellers of Australian hotel accommodation are exempt from including sales of hotel accommodation in their GST turnover.
Sales that occur before 1 July 2019 will not be subject to the measure even if the stay at the hotel occurs after this date.
The unanimous agreement of the States and Territories will be required for the enactment of legislation.
The Federal Treasurer has announced that the GST which currently applies to feminine hygiene products will be removed with effect from 1 January 2019. Amending the GST requires the agreement of the states, which the Treasurer has indicated has now been obtained.
A GST determination was issued on 26 November 2018 which takes effect 1 January 2019.
See further: Removing GST on feminine hygiene products
The legislation has been passed by parliament to require purchasers to withhold and remit GST from settlement proceeds on the purchase of new residential premises and subdivisions.
The measures apply to contracts entered into from 1 July 2018, with pre-existing contracts excluded until 1 July 2020.
- Settlement Guide For Purchasers
- Settlement Guide For Vendors
- Detailed guidance – see Purchaser’s obligation to pay an amount for GST on taxable supplies of certain real property Law Companion Ruling LCR 2018/4
- Further info links – see: Minister’s media release and summary here and here and summary of the transitional measures
- See also Stamp duty payable on the total consideration including GST, even if paid directly to the ATO
The Government has passed legislation to reduce the current tax-free threshold on online sales of imported physical goods from $1,000 to zero.
The changes require non-resident suppliers with an Australian turnover of $75,000 or more to register and charge the GST.
- The Treasury Laws Amendment (GST Low Value Goods) Bill 2017 has been passed by parliament. Details here
- ATO: GST on low value imported goods
- Dropshipping arrangements – see Law Companion Ruling LCR 2018/1 GST on low value imported goods and article here
- see also:
- Law Companion Ruling LCR 2018/2 GST on supplies made through electronic distribution platforms
- Law Companion Ruling LCR 2018/3 When is a redeliverer responsible for GST on a supply of low value imported goods?
- Commentary – “Government releases draft legislation to extend GST to low value imported goods“
A 2015 Budget measure now enacted extends the application of GST to digital products and services obtained by consumers online from overseas suppliers.
The changes apply from 1 July 2017.
Foreign suppliers to Australian consumers (not through an enterprise in Australia) are required to register for GST if their turnover exceeds $75,000.
Under these measures, GST applies to anything other than goods or real property supplied to non-GST-registered Australian residents.
Note that these measures do not require GST-registered Australian businesses to pay GST on their imported inputs.
Where supplies are made by merchants through an Electronic Distribution Platform, GST liability falls on the Operator of the Electronic Distribution Platforms rather than the merchant.
The intention is that the affected suppliers and supplies will be subject to the same GST turnover, registration and payment rules as Australian domestic suppliers.
- Australia’s cross-border GST changes commencing 1 July 2017 – Wolters Kluwer 31 July 2017
- summary “The Netflix Tax And Other GST Changes For Cross Border Transactions” – Pitcher Partners news 9 March 2016
- Ruling: GSTR 2017/1 Goods and services tax: making cross-border supplies to Australian consumers
- ATO: GST registration for your non-resident clients
The Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016 passed by parliament in May 2016 relieves non-resident suppliers of the obligation to account for GST on certain supplies, with any GST obligations shifted to Australian-based business recipients that are already registered for GST.
Non-residents and their resident agents can agree that the resident agent will be the liable entity for GST, despite the other amendments.
The measures are designed to prevent nonresident businesses being unnecessarily drawn into the Australian GST system through B2B transactions and come into effect from 1 October 2016.
- GST registration system for non-resident businesses
- Law Companion Guide LCG 2016/1 – GST and carrying on an enterprise in the indirect tax zone (Australia)
- GST cross-border transactions between businesses
News: 17 February 2017 The Federal Court has decided (consistent with the position advanced by the Tax Office) that Uber services are indeed “taxi travel” for gst purposes. The Court accepted that the concept of “taxi travel” as defined in s 195-1 of the GST rules should be construed broadly and not technically.
- Uber, Taxis and Quacking Ducks
- Centrelink, Big Data And The Long Arm of Data Matching
- Federal Court finds UberX drivers supply “taxi travel” to customers
[News: Nov 2016]
A Practical Compliance Guideline (PCG 2016/18) released by the Tax Office potentially reduces GST compliance in relation to certain barter (countertrade) transactions.
Basically, direct barter transactions which are GST-neutral will not be the subject to ATO enforcement of the GST reporting requirements. Those requirements would otherwise require the production of tax invoices and the determination of GST value.
A proviso is that countertrade transactions are no more than “approximately 10% of the entity’s total number of supplies”.
See also: “PCG makes GST barter transactions simpler”
As part of the 2017-18 Budget, the Government announced it would remove the double taxation of digital currency from 1 July 2017. From 1 July 2017, digital currency will be treated just like money for GST purposes.
Legislation has now been approved by parliament. See: Treasury Laws Amendment (2017 Measures No. 6) Bill
Supplies by registered charities endorsed by the Tax Office are GST-free if provided for ‘nominal’ consideration.
In determining whether the consideration is nominal, the entity may (subject to qualification) use a market value or cost of supply method.
Where the market value method is used, the Tax Office provides market value benchmarks by which to determine whether a supply’s consideration may be considered ‘nominal’ (and hence GST-free) or not.
These reflect the application of Sec 38-250 of the GST rules
Under the market value method, the supply by an endorsed charity will be considered to be for nominal consideration if it is
- less than 75% of the GST-inclusive market value for supplies of accommodation
- less than 50% of the GST-inclusive market value for supplies other than accommodation.
Market value benchmarks categorised by expense type and geographical location are updated by the Tax Office on an annual basis.
Under the cost of supply method, the supply by an endorsed charity will be considered to be for nominal consideration if it is
- supplied at less than 75% of the cost to the charity.
See further – guidelines.
The Tax Office has organised GST information as it applies to property transactions into categories.
- GST and property
- GST and residential property
- GST and commercial property
- GST at settlement
- GST and the margin scheme
This page was last modified 2019-10-29