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

Chapter 4 - The special rules  

Part 4-6 - Special rules mainly about tax periods  

Note:

The special rules in this Part mainly modify the operation of Part 2-6 , but they may affect other Parts of Chapter 2 in minor ways.

Division 159 - Changing your accounting basis  

159-15   Ceasing to account on a cash basis - bad debts  

(1)  
If:


(a) the GST payable by you on a * taxable supply or the input tax credit to which you are entitled for a * creditable acquisition is attributable to a particular tax period (the transition tax period) under section 159-5 or 159-10 ; and


(b) before the start of the transition tax period, the whole or part of a debt relating to the * consideration for the supply or acquisition is written off as bad;

then:


(c) the amount written off, and any part of that amount recovered before the start of the transition tax period, is to be treated, for the purposes of Division 21 , as if at all relevant times you were not * accounting on a cash basis ; and


(d) any adjustment arising under Division 21 as a result is attributable to the transition tax period.

(2)  
This section has effect despite subsections 21-5(2) and 21-15(2) (which preclude adjustments for bad debts when accounting on a cash basis) and section 29-20 (which is about attributing adjustments).




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