Primary producers and special professionals who meet certain criteria only pay GST instalments in the last two quarters of a financial year. The instalment amounts for the first and second quarters are included in the third quarter instalment.
You pay two instalments a year if:
- you're a primary producer or a special professional, such as an author, inventor, performing artist, production associate or sportsperson
- your net income as a primary producer or special professional in your last assessment was at least $1 (that is, your income exceeded your deductions and the business did not run at a loss).
When working out your net income:
- ignore any carried-forward losses
- include net farm management deposits and withdrawals if withdrawals were more than deposits.
If you pay two instalments, we work out the instalment amounts so that you pay:
- 75% of your annual GST liability – and any wine equalisation tax or luxury car tax liability you may have – by 28 April
- the remaining 25% by 28 July.
Example: Primary producer
Russell owns and operates a dairy farm.
On 28 October 2016 he chooses to pay GST by instalments. While Russell has not yet lodged his tax return for the 2015–16 income year, in his 2014–15 tax return he had:
- $200,000 income from dairy sales
- farm expenses of $150,000
- a carried-forward tax loss of $60,000.
While Russell has a net loss of $10,000 ($200,000 income from dairy sales less $150,000 farm expenses, less $60,000 tax loss carried forward) for his most recently lodged tax return, he still pays GST for the year in two instalments. This is because:
- he carries on a primary production business
- his assessable income from that business ($200,000) was more than his deductions related to that income ($150,000) in his most recent tax return.
Russell does not take his carried-forward losses into account when working out whether he pays two or four instalments.End of example
Example: Special professional
Jana writes romance novels and short stories.
On 28 October 2016 she chooses to pay GST by instalments. Jana lodged her 2014–15 tax return in August 2015. In that year she earned $33,000 for her novels and $6,000 for a series of stories in a magazine. Her allowable deductions for expenses she incurred in producing this income were $5,000, leaving her with net assessable income from her writing activities of $34,000.
Jana pays GST for the year in two instalments because:
- she is a special professional
- her assessable professional income ($39,000) was more than her deductions related to that income in her most recent tax return.
- TR 97/11 Income tax: Am I carrying on a business of primary production?