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  • Levelling the playing field for online hotel bookings

    On 8 May 2018 the Federal Government announced it would level the playing field to ensure offshore sellers of Australian hotel accommodation calculate their goods and services tax (GST) turnover in the same way as local sellers from 1 July 2019.

    Unlike Australian-based businesses, offshore sellers of Australian hotel accommodation are exempt from including sales of hotel accommodation in their GST turnover. This means they are often not required to register for and charge GST on their mark-up on the wholesale price of the accommodation.

    Removing this exemption will level the playing field by ensuring the same tax treatment of Australian hotel accommodation when booked through a domestic or an offshore seller.

    If accommodation is paid for (in part or in full) before 1 July 2019 the sale from the offshore seller will not be subject to GST.

    Administrative treatment

    Schedule 2 of the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019External Link will amend the A New Tax System (Goods and Services Tax) Act 1999 and will have a start date of 1 July 2019. As such once this legislation passes Parliament it will have a retrospective effect for offshore sellers of Australian accommodation.

    Advice and administrative treatments specific to this reform are outlined below.

    You should also note our general advice on the administrative treatment of retrospective legislation.

    See also:

    Offshore seller

    Registering for GST

    You may need to consider if you are required to be registered for GST from 1 July 2019 in the event that the law passes Parliament.

    Standard GST registration is the most relevant to offshore sellers of accommodation.

    See also:

    Tax invoices

    Once the law has passed Parliament you will need to provide a tax invoice within 28 days of customers' requests for taxable sales of accommodation from 1 July 2019.

    See also:

    GST reporting and payment

    You are not required to pay or report GST on relevant sales until the proposed law passes Parliament.

    Affected offshore sellers are expected to keep business records to enable GST to be reported and paid as soon as reasonably practicable after the law is enacted.

    You may be entitled to claim GST credits once you are registered or required to be registered. However, you cannot claim a GST credit until you hold a tax invoice or a recipient created tax invoice (RCTI). You cannot issue an RCTI unless you are eligible to do so and have a written RCTI agreement with the Australian accommodation provider.

    See also:

    Concessional treatment for offshore sellers

    If you make a genuine attempt to comply we will apply a concession and you won't have to pay penalties during the first 12 months of this measure.

    The concession is not automatic and you will need to advise us that you want to access these concessions. Following the law passing Parliament, we will publish additional guidance to outline how you can request access to these concessions.

    We’re here to support you and expect you will take reasonable steps to comply.

    Australian accommodation providers

    If you are an Australian accommodation provider and use offshore intermediaries to sell accommodation, you need to determine if you are selling:

    • directly to the customer using the accommodation or
    • to the offshore intermediary (reseller).

    If offshore intermediaries are reselling your accommodation, you need to provide tax invoices to them within 28 days of their request or enter into an RCTI agreement with them.

    Customers purchasing accommodation

    Business customers should not request a tax invoice from offshore sellers until after the law passes Parliament.

    Legislation and supporting material

    The Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019External Link was introduced to Parliament on 4 July 2019 and is currently before the Senate.

    The current Bill was preceded by the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018External Link and was introduced to Parliament on 20 September 2018, but lapsed at the dissolution of Parliament prior to the 2019 Federal Election.

    See also:

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      Last modified: 12 Aug 2019QC 59818