House of Representatives

A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 5 - ABNs

Outline of Chapter

5.1 This Chapter explains the amendments made to the ABN Act to ensure that overseas businesses that are required to register for GST purposes are able to obtain an ABN.

Detailed explanation of the amendments

5.2 Item 1 amends subsection 8(1) to include a further category where an entity will be entitled to have an ABN. Currently an entity must be carrying on an enterprise in Australia to have an ABN. The additional circumstance where an entity will be able to have an ABN is if in the course or furtherance of an enterprise, an entity makes supplies that are connected with Australia. The terms connected with Australia and supply have the meanings given by the GST Act. [Items 4 and 5]

5.3 An example of a situation where an enterprise may not be carried on in Australia, but the entity will be required to be registered for GST and therefore hold an ABN, is an overseas telecommunications supplier that is making supplies that are connected with Australia.

5.4 Item 2 repeals section 39 of the ABN Act. The application of this section would have prevented a non-resident without a permanent establishment in Australia from obtaining an ABN. This amendment removes this restriction and will allow, for example, a visiting entertainer, sportsperson or overseas telecommunication supplier to obtain an ABN where they are making supplies connected with Australia in the course of carrying on an enterprise. This will allow them to meet their GST obligations in respect of any supplies connected with Australia.

5.5 Item 3 removes the definition of carried on in Australia from section 41 of the ABN Act.

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