House of Representatives

Tax Laws Amendment (2009 GST Administration Measures) Bill 2009

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan MP)

General outline and financial impact

Creating a consistent four-year period for claiming input tax credits and fuel tax credits

Schedule 1 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 , the Fuel Tax Act 2006 , the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 to require that input tax credits and fuel tax credits are claimed within a four-year period.

Date of effect: This measure applies to goods and services tax (GST) returns and assessments lodged or issued after 7.30 pm (Australian Eastern Standard Time) on 12 May 2009 and revisions to GST returns and revised assessments issued or made after this time.

It also applies to returns and assessments for the purposes of fuel tax law and amendments to these returns and revised assessments issued or made on or after 1 July 2010.

Proposal announced: This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: This measure will have an unquantifiable, but expected to be small, impact on both GST and fuel tax credit revenue from the 2009-10 years.

Compliance cost impact: Low. This measure will affect a small proportion of businesses. There is no ongoing compliance cost impact. The change brings the treatment of input tax credits and fuel tax credits into line with the existing rules for other GST and fuel tax credit liabilities and entitlements. There is a small transitional impact, reflecting the need for affected taxpayers to learn about and apply the amendment.

Australian External Territory refund collection system

Schedule 2 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 and the A New Tax System (Wine Equalisation Tax) Act 1999 to allow residents of Australia's External Territories (such as Norfolk, Cocos (Keeling) and Christmas Islands) to claim refunds of goods and services tax (GST), or GST and subsequently wine equalisation tax (WET) under the tourist refund scheme if they can show proof that the goods have been exported to their External Territory within the required time after the goods were acquired.

Date of effect: The scheme will apply to goods purchased on or after 1 July 2010.

Proposal announced: The Government announced in the 2009-10 Budget that it would introduce a system under which residents of Australia's External Territories (such as Norfolk, Cocos (Keeling) and Christmas Islands) can claim refunds of GST and WET under the tourist refund scheme if they can show proof of shipping of exported goods to their External Territory.

This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: The measure will have an unquantifiable, but expected small cost to revenue.

Compliance cost impact: Implementation of the refund collection system is expected to result in minor transitional compliance and administration costs.

Agency provisions

Schedule 3 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to increase the range of entities entitled to act as a principal for goods and services tax (GST) accounting purposes.

The amendments allow entities that facilitate supplies or acquisitions for another to utilise these simplified accounting procedures, subject broadly to the principal and intermediary agreeing that the intermediary will take responsibility for using these accounting procedures in relation to certain transactions.

The amendments are intended to reduce the compliance costs of GST accounting where paying agents, billing agents and other transaction facilitators are used by a principal.

Date of effect: The amendments apply to supplies and acquisitions by intermediaries made on or after 1 July 2010.

Proposal announced: This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: The cost of the measure is unquantifiable but expected to be negligible.

Compliance cost impact: The measure is expected to result in a small decrease in ongoing compliance costs.

Gambling activities by entities outside Australia

Schedule 4 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to clarify how a gambling operator's margin is calculated where the supplies made by the operator are GST-free.

The amendments exclude from total monetary prizes amounts that the gambling operator is liable to pay out on supplies (bets) that are GST-free. This will mean that the prize money that the gambling operator is liable to pay to entities outside Australia will be excluded from total monetary prizes (because supplies made to entities outside Australia are GST-free).

Date of effect: The amendments apply to monetary prizes that the operator is liable to pay during or after the first quarterly tax period commencing on or after Royal Assent.

Proposal announced: This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: Unquantifiable.

Compliance cost impact: Low.

Recovering overpaid refunds

Schedule 5 to this Bill amends the:

·
A New Tax System (Goods and Services Tax) Act 1999 so that an overpaid refund under section 35-5 of that Act is treated as an amount due and payable from the date of the overpayment;
·
A New Tax System (Luxury Car Tax) Act 1999 so that an overpaid refund under section 17-5 of that Act is treated as an amount due and payable from the date of the overpayment; and
·
Fuel Tax Act 2006 so that an overpaid refund under section 61-5 of that Act is treated as an amount due and payable from the date of the overpayment.

Date of effect: This measure applies from the start of the first quarterly tax period after Royal Assent.

Proposal announced: This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: Unquantifiable.

Compliance cost impact: Low.

GST and associates provisions

Schedule 6 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to ensure the goods and services tax (GST) treatment of a supply to an associate without consideration is as an input taxed supply, a GST-free supply, or a financial supply where appropriate.

The proposed amendments also ensure that a supply to an associate that would be a sale (or some other particular kind of supply) if made for consideration will be taken to be such a supply despite there being no consideration. Similarly, an acquisition from an associate that would be by way of sale (or some other particular means) if consideration was provided will be taken to be such an acquisition despite there being no consideration.

Date of effect: These provisions take effect from the date of Royal Assent.

Proposal announced: This measure was announced in the then Assistant Treasurer's Media Release No. 042 of 12 May 2009.

Financial impact: Unquantifiable.

Compliance cost impact: Low.


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