A New Tax System (Goods and Services Tax) Act 1999

Chapter 4 - The special rules  

Part 4-2 - Special rules mainly about supplies and acquisitions  


The special rules in this Part mainly modify the operation of Part 2-2 , but they may affect other Parts of Chapter 2 in minor ways.

Division 105 - Supplies in satisfaction of debts  

105-5   Supplies by creditors in satisfaction of debts may be taxable supplies  

You make a taxable supply if:

(a) you supply the property of another entity (the debtor ) to a third entity in or towards the satisfaction of a debt that the debtor owes to you; and

(b) had the debtor made the supply, the supply would have been a * taxable supply .

It does not matter whether:

(a) you made the supply in the course or furtherance of an * enterprise that you * carry on ; or

(b) you are * registered , or * required to be registered .

However, the supply is not a * taxable supply if:

(a) the debtor has given you a written notice stating that the supply would not be a taxable supply if the debtor were to make it, and stating fully the reasons why the supply would not be a taxable supply; or

(b) if you cannot obtain such a notice - you believe on the basis of reasonable information that the supply would not be a taxable supply if the debtor were to make it.

This section has effect despite section 9-5 (which is about what is a taxable supply).

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