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  • Representatives of incapacitated entities



    Where appropriate, individual issues in this issues register include a reference to a public ruling which is related to the relevant issue. In some cases, the issue is itself labelled as a public ruling for the purposes of section 105-60 of Schedule 1 of the Taxation Administration Act 1953  (TAA). Where an issue in this issue register simply sets out the way the law applies, rather than dealing substantially with a question of legal interpretation, we have added to the item the description 'non-interpretative'.

    From 1 July 2010, issues labelled as a public ruling in this register will continue to be a public ruling even though section 105-60 of Schedule 1 of the TAA has been repealed.

    A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes.

    If you rely on issues in this register that are a ruling, we must apply the law to you in the way set out in the ruling. However, if we are satisfied that the ruling is incorrect and disadvantages you, we may apply the law in a way that is more favourable for you - provided we are not prevented from doing so by a time limit imposed by the law. You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

    Issues in this register that have not been labelled as public rulings, constitute written guidance. If you follow our information on these issues and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.

    End of attention

    On 4 December 2009, the Tax Laws Amendment (2009 Measures No.5) Bill 2009 was enacted to replace Division 147 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) with Division 58.

    Amendments with effect from 1 July 2000:

    Briefly, the key provisions of Division 58 are:

    • A supply, acquisition or importation by a representative, in its capacity as a representative, is taken, for GST purposes, to be a supply, acquisition or importation of the incapacitated entity [section 58-5].
    • However, the representative (and not the incapacitated entity) is liable for or entitled to certain GST consequences that arise from a supply, acquisition or importation or related acts or omissions during the representative's appointment [section 58-10].

    Amendments with effect from the date of royal assent (4 December 2009):

    Division 58 also introduces new obligations on representatives including:

    • If directed by the Commissioner, a representative of an incapacitated entity must give to the Commissioner a GST return for a tax period applying to the incapacitated entity if the incapacitated entity has failed to give such a return [section 58-50].
    • If a representative becomes aware, or could reasonably be expected to have become aware of, any increasing adjustments or GST liability that an incapacitated entity has, and the amount of GST or increasing adjustment has not been reported in a GST return, the representative must notify the Commissioner of the amount of GST or increasing adjustment [section 58-60].

    This register has been updated to provide responses to key questions relating to the operation Division of 58. The following abbreviations are used throughout the log:

    • ABN refers to Australian Business Number
    • Bankruptcy Act refers to the Bankruptcy Act 1966
    • BAS refers to Business activity statement
    • CAC refers to client activity centre
    • Corporations Act refers to the Corporations Act 2001
    • GST Act refers to the A New Tax System (Goods and Services Tax Act) 1999
    • GST Regulations refer to the A New Tax System (Goods and Services Tax) Regulations 1999
    • ITAA 1936 refers to the Income Tax Assessment Act 1936
    • TAA refers to the Taxation Administration Act 1953.

    All legislative references in the issue log are to the GST Act unless otherwise specified.

    End of attention


    Date updated Question


    1. Basic concepts


    1.1. Who is a representative under Division 58?


    1.2. Who is an incapacitated entity under Division 58?


    2. Registration requirements


    2.1. What are the registration and notification requirements for a representative upon appointment under the GST Act?


    2.2. Is a representative of an incapacitated entity who is appointed over only part of the assets required to register under section 58-20?


    2.3. Under Division 58, a representative of an incapacitated entity may be required to be registered. Upon registration, is the representative issued with a new ABN, or will the existing ABN of the incapacitated entity be used?


    3. Tax periods


    3.1. What is the applicable tax period for the representative upon their appointment?


    3.2. What happens to the current tax period of the incapacitated entity when a representative is appointed?


    4. Joint and several liability


    4.1 Where there are two or more representatives of the same incapacitated entity at the same time, are they jointly and severally liable for GST payable in their capacities as representatives of the same incapacitated entity?


    5. In-specie distribution


    5.1. Is an in-specie distribution made from a representative to a shareholder a taxable supply?


    6. Tax invoice


    6.1. What name should appear on tax invoices issued to or by the representative so that they meet the requirements of GST law?


    7. GST liability and adjustment notification requirements


    7.1. Under what circumstances is a representative of an incapacitated entity required to notify the Commissioner of the liability or adjustment under section 58-60?


    7.2. What information needs to be provided to meet the requirements of notifying the Australian Taxation Office (ATO) of a GST liability or an increasing adjustment (under section 58-60)?


    7.3. When should the notification of GST liability or increasing adjustments under section 58-60 be made?

      Last modified: 02 Apr 2013QC 16292