Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act 2016 (52 of 2016)

Schedule 1   Tax integrity: extending GST to digital products and other services imported by consumers

Part 1   Main amendments

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

6   Before Division 85

Insert:

Subdivision 84-B - Inbound intangible consumer supplies

84-45 What this Subdivision is about

Tax invoices and adjustment notes are not required for offshore supplies to Australian consumers.

The operator of an electronic distribution platform is treated as having made electronic supplies that are made through the platform:

(a) from offshore to Australian consumers; or

(b) in some cases, under an agreement with the supplier.

The result is that the operator, instead of the suppliers, counts the supplies towards its GST turnover and pays GST on the supplies.

84-50 No tax invoices or adjustment notes for inbound intangible consumer supplies

(1) You are not required to issue a *tax invoice for a *taxable supply that you make if the supply is solely an *inbound intangible consumer supply.

(2) You are not required to issue an *adjustment note for an *adjustment event relating to a *taxable supply that you make if the supply is solely an *inbound intangible consumer supply.

(3) This section has effect despite sections 29-70 and 29-75 (which are about tax invoices and adjustment notes).

84-55 Operator of electronic distribution platform treated as supplier

(1) If an *inbound intangible consumer supply is made through an *electronic distribution platform, the operator of the platform, instead of the supplier, is treated, for the purposes of the *GST law:

(a) as being the supplier of, and as making, the supply; and

(b) as having made the supply for the *consideration for which it was made; and

(c) as having made the supply in the course or furtherance of an *enterprise that the operator *carries on.

Note: As a consequence, GST on the supply is payable by the operator of the electronic distribution platform.

(2) Despite subsection (1), if an *inbound intangible consumer supply is made through more than one *electronic distribution platform, that subsection only applies to the operator of any of those platforms who is:

(a) a party to a written agreement, between the operator and at least one of the other operators of the platforms, under which the operator is to be treated as the supplier; or

(b) if no such agreement has been made - the operator determined in accordance with an instrument made under subsection (3); or

(c) if no such agreement has been made and no instrument has been made under subsection (3):

(i) the first of the operators of those platforms to receive, or to authorise the charging of, any *consideration for the supply; or

(ii) if subparagraph (i) does not apply - the first of the operators of those platforms to authorise the delivery of the supply.

(3) The Commissioner may, by legislative instrument, specify how an operator is to be determined for the purposes of paragraph (2)(b).

(4) Despite subsections (1) and (2), this section does not apply to an operator of an *electronic distribution platform in relation to an *inbound intangible consumer supply made through the platform if:

(a) a document, relating to the supply, issued to the *recipient of the supply identifies:

(i) the supply; and

(ii) the supplier as the supplier of the supply; and

(b) the supplier and the operator of the electronic distribution platform have agreed in writing that the supplier is the entity responsible for paying GST for:

(i) the supply; or

(ii) a class of supplies that includes the supply; and

(c) the operator of the electronic distribution platform:

(i) does not authorise the charge to the recipient for the supply; and

(ii) does not authorise the delivery of the supply; and

(iii) does not set the terms and conditions under which the supply is made.

84-60 Extension of section 84-55 to certain other supplies through an electronic distribution platform

(1) Section 84-55 applies to a supply as if it were an *inbound intangible consumer supply if:

(a) the supply is made through an *electronic distribution platform; and

(b) the supply is covered by a written agreement entered into between the supplier and the operator of the platform before the supply is made; and

(c) the operator is *registered; and

(d) under the agreement, the supply is to be treated as if it were an inbound intangible consumer supply made through the platform.

(2) However, subsection (1) does not apply to the supply if:

(a) the supply is GST-free or input taxed; or

(b) the operator would not be treated under section 84-55 as being the supplier of, and as making, the supply if it were an *inbound intangible consumer supply.

(3) If subsection (1) applies to the supply, the supply is treated as having been made in the course or furtherance of the carrying on of the *enterprise through which the operator operates the platform.

84-65 Meaning of inbound intangible consumer supply

(1) A supply of anything other than goods or *real property is an inbound intangible consumer supply if the *recipient is an *Australian consumer, unless:

(a) the thing is done wholly in the indirect tax zone; or

(b) the supplier makes the supply wholly through an *enterprise that the supplier *carries on in the indirect tax zone.

(2) Disregard section 84-55 in determining whether paragraph (1)(b) applies.

84-70 Meaning of electronic distribution platform

(1) A service (including a website, internet portal, gateway, store or marketplace) is an electronic distribution platform if:

(a) the service allows entities to make supplies available to end-users; and

(b) the service is delivered by means of *electronic communication; and

(c) the supplies are to be made by means of electronic communication.

(2) However, a service is not an electronic distribution platform solely because it is:

(a) a carriage service (within the meaning of the Telecommunications Act 1997); or

(b) a service consisting of one or more of the following:

(i) providing access to a payment system;

(ii) processing payments;

(iii) providing *vouchers the supply of which are not *taxable supplies because of section 100-5.

Subdivision 84-C - Australian consumers

84-95 What this Subdivision is about

A supplier is treated in some situations to be making a supply to an entity that is not an Australian consumer.

Note: Whether the recipient of a supply of an intangible is an Australian consumer is one of the tests for whether the supply is connected with Australia: see subsection 9-25(5).

84-100 When entities are treated as not being Australian consumers

(1) The *GST law applies in relation to you as if another entity was not an *Australian consumer of a supply if:

(a) you take reasonable steps to obtain information about whether or not the other entity is an Australian consumer of the supply; and

(b) after taking those steps, you reasonably believe that the other entity is not an Australian consumer of the supply.

(2) Without limiting subsection (1), the *GST law applies in relation to you as if another entity was not an *Australian consumer of a supply if:

(a) your usual business systems and processes provide you with a reasonable basis for forming a reasonable belief about whether the other entity is an Australian consumer of the supply; and

(b) you reasonably believe that the other entity is not an Australian consumer of the supply.

(3) For the purposes of subsections (1) and (2), to the extent that your belief that the other entity is not an *Australian consumer of the supply is based on the other entity being *registered, your belief is reasonable only if:

(a) the other entity's *ABN, or the other identifying information prescribed under subsection (4) relating to the other entity, has been disclosed to you; and

(b) the other entity has provided to you a declaration or information that indicates that the other entity is registered.

(4) The Commissioner may, by legislative instrument, prescribe identifying information for the purposes of paragraph (3)(a).

Subdivision 84-D - Limited registration entities

84-135 What this Subdivision is about

Non-residents may elect to be limited registration entities. Limited registration entities are not entitled to input tax credits for acquisitions, and must have quarterly tax periods.

Note: The Commissioner may approve simpler approved forms for limited registration entities: see subsection 388-50(3) in Schedule 1 to the Taxation Administration Act 1953.

84-140 Limited registration entities

(1) You are a limited registration entity for a tax period applying to you if an election under subsection (2) is in effect for you during the period.

Electing to be a limited registration entity

(2) You may, by notifying the Commissioner in the *approved form, make an election under this subsection if:

(a) you have made, or intend to make, one or more *inbound intangible consumer supplies; and

(b) you are a *non-resident.

When an election is in effect

(3) The election:

(a) takes effect from the start of the tax period you nominate in the election; and

(b) if your *registration is cancelled and the date of effect of the cancellation occurs after the start of that tax period - ceases to have effect on the date of effect of the cancellation; and

(c) if paragraph (b) does not apply and, under subsection (5), you revoke the election - ceases to have effect at the start of your first tax period to start after the revocation.

(4) However, the election never takes effect if your *registration is cancelled and the date of effect of the cancellation occurs on or before the start of the tax period you nominate in the election.

Revoking an election

(5) You may, by notifying the Commissioner in the *approved form, revoke an election under subsection (2).

(6) However, subsection (5) does not apply if you have been notified that the Commissioner has decided to cancel your *registration (whether or not the cancellation has already taken effect).

84-145 Limited registration entities cannot make creditable acquisitions

(1) An acquisition made by a *limited registration entity is not a *creditable acquisition if an election under subsection 84-140(2) is in effect for the entity when the acquisition is made.

(2) However, subsection (1) does not apply, and is taken never to have applied, to the acquisition if you revoke the election under subsection 84-140(5) during:

(a) the *financial year in which the acquisition is made; or

(b) the next financial year.

(3) This section has effect despite section 11-5 (which is about what is a creditable acquisition).

84-150 Entries in the Australian Business Register

(1) Subsection 25-10(2) does not apply if:

(a) you become *registered; and

(b) on the date your registration takes or took effect, you are a *limited registration entity.

Note: Under subsection 25-10(2), the Australian Business Registrar would otherwise be required to enter that date in the Australian Business Register.

(2) However, if:

(a) you cease to be a *limited registration entity at a time when you are *registered; and

(b) because of subsection (1) of this subsection, subsection 25-10(2) did not apply to your registration;

subsection 25-10(2) is taken to apply from the time you cease to be a limited registration entity.

(3) Subsection 25-60(2) does not apply if:

(a) your *registration is cancelled; and

(b) because of subsection (1) of this section, the date on which your registration took effect was not entered in the *Australian Business Register; and

(c) immediately before the cancellation took effect, you were a *limited registration entity.

Note: Under subsection 25-60(2), the Australian Business Registrar would otherwise be required to enter that date in the Australian Business Register.

84-155 Limited registration entities have only quarterly tax periods

(1) If you are a *limited registration entity, you cannot make an election under section 27-10, and the Commissioner cannot determine your tax periods under section 27-15 or 27-37.

Note: Sections 27-10 and 27-15 provide for each individual month to be a tax period. Section 27-37 provides for 12 complete tax periods in each year.

(2) An election by you under section 27-10 or a determination under section 27-15 or 27-37 in relation to you is taken not to be in force at any time during which you are a *limited registration entity.

(3) This section has effect despite sections 27-10, 27-15 and 27-37 (which are about one month tax periods).