A New Tax System (Goods and Services Tax) Regulations 1999 (repealed)

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

Division 70 - Financial supplies (reduced credit acquisitions)  

70-5.02C   70-5.02C   Unabsorbed contribution  
For subregulation 70-5.02A(2) , the performance by a third party, on behalf of the supplying enterprise or a closely related enterprise of the supplying enterprise, of all or part of the relevant supply is an unabsorbed contribution if:


(a) the amount paid or payable, or part of the amount paid or payable, by the supplying enterprise for the performance is passed on by the supplying enterprise to the receiving enterprise as part of the price of the relevant supply; and


(b) the enterprise carried on by the third party is not closely related to the supplying enterprise; and


(c) the thing that is involved in the performance by the third party retains, at the time of the relevant supply, the substance and character that it had when first purchased, for the purposes of the relevant supply, by an entity that carries on an enterprise that is closely related to the supplying enterprise.

Example for paragraph (c)

Legal advice that is given in the following circumstances is an unabsorbed contribution:

  • · the advice is acquired by the supplying enterprise from a third party service provider as part of the provision of in-house legal services by the supplying enterprise to its 100% subsidiary in the indirect tax zone;
  • · the external legal service provider is not closely related to the supplying enterprise;
  • · the advice is passed on to the 100% subsidiary in the indirect tax zone by the supplying enterprise;
  • · the amount paid or payable for the advice is passed on to the 100% subsidiary in the indirect tax zone as part of the price that the supplying enterprise charges for the provision of in-house legal services.



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