• Sales and purchases

    Is there a supply when staff and assets are transferred to the gaining agency following a MOG change?

    There are generally no GST consequences if staff and assets are compulsorily transferred to the gaining agency as a result of MOG changes. The transfers can be given effect by:

    • gazettal of a notice
    • specific legislation abolishing a losing agency
    • proclamation such as in the case of local authorities.

    However, in situations where the staff and assets are transferred as a result of MOG changes and the losing agency has taken action to cause those assets to be transferred to the gaining agency, then there may be GST consequences.

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    For further information, refer to GSTR 2006/9External Link Goods and services tax: supplies (see paragraphs 71 to 91).

    End of find out more

    Does a gaining agency make a taxable supply when it assumes the liabilities of a losing agency as a result of MOG changes?

    Generally there are no GST consequences for either the losing agency or the gaining agency if assets or liabilities are transferred as a result of MOG changes, provided that the gaining agency assuming those liabilities has not acted to assume those liabilities.

    Is the GST treatment of an appropriation affected when a government organisation is abolished as a result of a MOG change?

    When a MOG change occurs, a redirection authority within an Appropriate Act would normally be invoked to redirect the funds to a new government organisation.

    For GST purposes, the payment of the redirected funds, if on similar terms, will have the same GST consequences as the payment would have had when paid to the previous agency.

    In addition, it is considered that the act of merely transferring unspent funds held by the original government related entity to the government related entity that now has responsibility for the function, is a transfer of money and not itself a supply.

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    For further information concerning payments between government related entities that are subject to GST refer to GST and payments between government related entities – overview.

    End of find out more

    Can a government organisation, emerging from a MOG change, rely on items in a Treasurer determination that applied to a former government organisation?

    The payment of any Australian tax, fee or charge that is specified in a written determination of the Treasurer is not subject to GST. This applies where such a tax, fee or charge is paid to a gaining agency which is still a government organisation after a MOG change.

    The Treasurer's determination no longer applies from 1 July 2013. The amended Division 81 and the relevant Regulations of the A New Tax System (Goods and Services Tax) Act 1999 applies from 1 July 2013. For the ATO administrative treatment of Division 81 taxes, fees and charges refer to PS LA 2013/2 (GA)External Link GST treatment of Australian fees or charges under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999.

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    For more information, refer to the former subsection 81-5(2) of the GST Act which states that the payment of any Australian tax, fee or charge that is specified in a written determination of the Treasurer is not the provision of consideration.

    End of find out more
      Last modified: 03 Mar 2014QC 25055