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  • GST States and Territories Industry Partnership minutes 4 April 2019

    The GST States and Territories Industry Partnership (STIP) meeting was held on Thursday 4 April 2019

    A summary of topics discussed is provided below

    1. GST STIP Minutes

    Presented by Brendan Sheen, ATO

    Brendan introduced ATO staff at the meeting.

    Then directed members to the last meeting minutes available.

    The record of meeting from the previous GST STIP meeting held on 20 September 2018 have been published on the ATO website and may be accessed via the following link: GST-States-and-Territories-Industry-Partnership-minutes-20-September-2018.

    2. GST Technical Update

    Presented by Martyn Lyons, ATO

    ATO has updated the GST Digest with changes over the last six months. The GST Digest has been provided to STIP members.

    These changes included:

    3. Development Leases

    Presented by Loretta Bishop-Spalding, ATO

    The ATO has concerns about certain property development arrangements. The concerns relate to the incorrect reporting of GST by government entities selling land, and or by developers who provided development services to those government entities as part of the arrangement.

    • There are concerns about parties to the arrangements treating these supplies (development works) inconsistently.
    • In some instances, this may arise because of the value of the development works has not been agreed between the government entity and the developer, or the supply is not reported until GST can no longer be recovered due to the statutory time limits for amending activity statements.
    • In November 2018 the ATO issued a taxpayer alert on the GST implications of some of these development arrangements. The taxpayer alert encouraged participants to seek joint rulings to support consistent treatment of an agreement.
    • Registered tax agents or tax advisors involved in the promotion of these arrangements may be considered a ‘promoter’ of a scheme to avoid tax and be subject to penalty.
    • We are concerned that advice certain advisers are providing in relation to the GST treatment of these arrangements and have served notices on advisers to identify who may be targeted, engaged and the nature of the engagement.
    • We have issued formal notices against one advisor and are currently sorting through 6000 documents before formulating any opinions.
    • We will also be looking at agreements that include other non-monetary consideration such as ‘vision’.

    The meeting requested an example how these arrangements work – the link to the Taxpayer Alert TA 2018/3 includes two examples of how these arrangements work.

    If anyone has questions, or are considering or has entered into, a similar arrangement to that described in the alert, they can email us at GSTmail@ato.gov.au or contact Linda Griffiths on 02 4924 7882 or myself Loretta Bishop-Spalding on 08 7422 2536.

    4. Funding payments (Grants)

    Presented by Brendan Sheen, ATO

    The ATO has encountered an issue where there are questions as to whether the provision of certain funding payments (or ‘grants’) are subject to GST. The key consideration is whether the payments represent consideration for a taxable supply, but there is also the question of whether the funding payments relate to any supply at all.

    The correct GST treatments can only be determined through consideration of the facts and circumstances and the ATO is currently working with the relevant government department in order to clarify the technical position.

    This issue is being raised to promote awareness of this matter amongst the States and Territories representatives.

    For any queries relating to funding payments and the application of GST please contact ATO STIP representatives Brendan Sheen or Martyn Lyons to discuss.

    Additional information is contained in Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments.

    5. General Business

    Presented by Brendan Sheen, ATO

    The ATO is currently undertaking a risk assessment in terms of correct reporting of indirect taxes across the Government population.

    The preliminary indications suggest that areas of likely focus will be on:

    • the development lease issue, and
    • the GST treatment of funding payments.

    More generally, the ATO has a particular interest in further building its understanding of the government population and also the influence of advisors within the sector.

    Future GST impacts for States and Territories

    Presented by Brendan Sheen, ATO

    The ATO invited the members to consider and raise any GST issues which frequently arise, for consideration and discussion at the next meeting.

    A member asked about the regularity of the meetings, as problems sometimes arise within the six months between meetings. The member used to have a client relationship manager (CRM) who would collate questions and assist the member.

    The members are encouraged to contact the ATO outside these meetings as required. Where matters cannot be appropriately resolved through normal ATO referral channels, members are invited to contact the ATO representatives in this forum for necessary escalation or referral to assist in the resolution of issues.

    Removing irritants and better support

    Presented by Brendan Sheen, ATO

    The ATO is very keen to continue to work with the States and Territories to identify irritants for government agencies and receive suggestions on how the ATO can better support the government sector.

    The following questions were asked:

    1. A member asked about problems relating to obtaining AUSKEYS for multiple new entrants to GST.

    It was agreed that the member would be contacted outside the forum to discuss this matter further.

    2. A member asked about their departments BAS being held, and therefore the BAS refund delayed, due to Superannuation Guarantee issues. The inability for the department to have visibility of running balances was exacerbating the problem.

    It was agreed that the member would be contacted outside the forum to discuss this matter further.

    6. Wrap-Up and Close

    Meeting was closed at 1:45pm

    Next meeting

    The members decided that the date and location of the next meeting are to be confirmed.

    Attendees

    Organisation and name of attendees

    Organisation

    Members

    NT Government

    Joanne Staples

    NT Government

    Michael Kwong

    ACT Government

    Robert Enright

    Commonwealth Department

    Christine Havas

    Commonwealth Department

    Alice Walker

    NSW Government

    Joan Cram

    NSW Government

    Yisheng Ho

    SA Government

    Justyna Carlier

    WA Government

    Brad Prentice

    ATO

    Brendan Sheen ( Secretariat)

    ATO

    Carol Arcus ( Minutes)

    ATO

    Martyn Lyons

    ATO

    Loretta Bishop-Spalding

    ATO

    Monique D’Zilva

    Apologies

    Organisation

    Members

    QLD Government

    Daniel Fielding

    WA Government

    John Watts

    QLD Government

    Liza Gordon

    SA Government

    Tracey Scott

    VIC Government

    Peter Stibbard

      Last modified: 23 Apr 2019QC 58612