COMMONWEALTH OF AUSTRALIAThis legislative instrument replaces and repeals Goods and Services Tax: Waiver of Adjustment Note Requirement (Corporate Card Statements) Legislative Instrument (No.1) 2008 (F2008L03346), registered on 3 September 2008.
A New Tax System (Goods and Services Tax) Act 1999I, Timothy Dyce, Deputy Commissioner of Taxation, make this determination under subsection 29-20(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
1. Name of determination
This determination is the Goods and Services Tax: Waiver of Adjustment Note Requirement (Corporate Card Statements) Determination 2018.
This determination commences on the day after its registration on the Federal Register of Legislation.
3. Repeal of previous determination
This determination repeals and replaces Goods and Services Tax: Waiver of Adjustment Note Requirement (Corporate Card Statements) Legislative Instrument (No. 1) 2008 (F2008L03346) registered on 3 September 2008.
This determination applies to corporate card statement cardholders.
(1) The following expressions are defined for the purposes of this determination:
Acquirer is an entity that signs a merchant and is responsible for settlement to the merchant in respect of corporate card transactions acquired from that merchant.
C ardholder is the entity participating in an arrangement under which the corporate card is issued to that entity, or other entities at its request.
Corporate card is a card, or an account (where a physical card may not be issued), that is issued to and in the name of an entity or other entities at its request, and is intended to be used to purchase goods and services for commercial purposes.
Corporate card provider is:
- any of the following entities:
- American Express Australia Limited;
- Cabcharge Australia Limited;
- Diners Club Pty Limited;
- Entities that issue Visa corporate cards;
- Lufthansa AirPlus Servicekarten GmbH (Airplus International);
- Qantas Airways Limited; or
- an entity authorised by an entity listed above in paragraph (a) to provide their corporate card products.
Corporate card statement is a statement for a corporate card that is issued by or on behalf of a corporate card provider. It includes electronic data files of transactions and statements that are issued periodically or on demand.
GST Act means the A New Tax System (Goods and Services Tax) Act 1999.
GST registration number means the GST registration number of the supplier, which is either an Australian Business Number (ABN) or ATO Reference Number (ARN).
Mixed transaction supplier is a supplier who has indicated on a signed statement (referred to in section 10) that they provide taxable supplies as well as GST-free and/or input taxed supplies.
Supplier includes an agent through whom the supplier makes a supply.
(2) Other expressions in this determination have the same meaning as in the GST Act.
6. Relief from requirement to hold an adjustment note
For the purposes of attributing a decreasing adjustment (arising from an adjustment event in respect of an acquisition) to a tax period, a cardholder is not required (under subsection 29-20(3) of the GST Act) to hold an adjustment note for the decreasing adjustment if all the requirements in section 7 of this determination are satisfied.
7. Requirements for relief from holding an adjustment note
(1) At the time the cardholder gives its GST return/Business Activity Statement for the tax period to the Commissioner:
- the cardholder must hold a corporate card statement that records a transaction which includes the decreasing adjustment and meets the corporate card statement information requirements set out in section 8;
- the cardholder must meet all the requirements of section 12; and
- the decreasing adjustment on the corporate card statement must not have an 'estimated GST amount' that was calculated under subsection 10(b).
(2) For a corporate card statement the corporate card provider/acquirer must:
- meet the accuracy requirements set out in section 11;
- have in place an accurate method of obtaining or calculating the transaction information specified in paragraph 8(d), and
- can choose to use the signed statement method in accordance with section 9 to satisfy paragraph (2)(b) in relation to the decreasing adjustment.
8. Corporate card statement information requirements
The corporate card statement must contain enough information to enable the following to be ascertained by the cardholder:
- the date of issue of the corporate card statement;
- the identity or ABN of the cardholder;
- the name(s) of the person(s) or department(s) that uses the corporate card to purchase the creditable acquisition to which the adjustment relates, or in the case of fuel cards, the vehicle identifier;
- for the particular transactions containing the decreasing adjustment:
- the date the adjustment event occurred;
- the identity of the supplier, or driver ID for a supply of taxi travel;
- GST registration number of the supplier;
- the Branch Registration Number of the supplier (where applicable);
- a brief explanation of the reason for the adjustment or, if that is not available, a description or recognised code identifying the supplier's industry;
- the amount of the adjustment to the GST payable, or a statement to the effect that the difference in the price of the taxable supply includes GST; and
- the difference in the price of the supply before and after the adjustment event.
9. Use of signed statements for obtaining transaction information
(1) The corporate card provider/acquirer may, in relation to a supplier, use the signed statement method in section 10 to calculate the decreasing adjustment, provided they have a signed statement from each supplier that:
- states the GST registration number of the supplier;
- states the type of supplies (i.e. taxable, GST-free and/or input taxed supplies) made by the supplier, and for which the corporate card is accepted as payment;
- where the supplier only makes taxable supplies - states whether or not GST is calculated at 1/11th of the price for all the taxable supplies made by the supplier; and
- provides the corporate card provider/acquirer with an undertaking the corporate card provider/acquirer will be notified when the supplier:
- ceases to be registered for GST; or
- ceases to make only taxable supplies where the GST is calculated at 1/11th of the price.
(2) The corporate card provider/acquirer must retain the signed statement for at least 5 years after the supplier ceases their association with the corporate card provider/acquirer.
10. Calculating the adjustment or the estimated adjustment to GST payable using the signed statement method
The signed statement method for calculating the amount of an adjustment or an estimated adjustment to the GST payable is as follows:
- for an adjustment to the GST payable - where the supplier has indicated on the signed statement that the supplier only makes taxable supplies where the GST is 1/11th of the price, the corporate card provider/acquirer may calculate the amount of the adjustment to the GST payable as 1/11th of the change in price; or
- for an estimated adjustment to the GST payable - where a supplier has indicated on the signed statement that the supplier makes taxable supplies where GST may not be 1/11th of the price, or the supplier is a mixed transaction supplier, the corporate card provider/acquirer may calculate the estimated adjustment amount as 1/11th of the change in price of the relevant transaction if:
- the corporate card provider/acquirer indicates the estimated adjustment amount for this transaction must be verified;
- the corporate card provider/acquirer advises the cardholder to obtain an adjustment note before attributing a decreasing adjustment to a tax period (if required by subsection 29-20(3) of the GST Act); and
- at least one of the requirements in subparagraphs 10(b)(i) and 10(b)(ii) is prominently displayed on the corporate card statement.
11. Accuracy requirements for corporate card statements
Where the corporate card provider/acquirer has reason to consider any information set out in paragraph 8(d) or an estimated GST amount is not accurate, the corporate card provider/acquirer must not include that information on the corporate card statement.
12. Cardholder requirements
The cardholder must have in place:
- an effectively regulated corporate policy (that includes the retention of documentary evidence) for determining the amount of decreasing adjustments relating to acquisitions made on the corporate card that are wholly or partly of a private or domestic nature; and`
- an effectively regulated corporate policy that ensures the adjustment note and the corporate card statement are not incorrectly used to claim decreasing adjustments more than once for an adjustment event.
13. Reimbursement of employees etc
If the cardholder has a decreasing adjustment in relation to a reimbursement that section 111-5 of the GST Act applies:
- the cardholder is taken to meet paragraph 7(1)(a) if they hold a corporate card statement that includes the details at section 8 for the expense for which reimbursement is paid to which the adjustment relates;
- a reference to the creditable acquisition to which the adjustment relates in paragraph 8(c) is taken to be a reference to the expense for which the reimbursement is paid to which the adjustment relates; and
- any reference to a decreasing adjustment in section 8 is taken to be a reference to a decreasing adjustment to the expense for which the reimbursement is paid.
Dated: 24 September 2018
Signed by Timothy Dyce
Deputy Commissioner of Taxation
Signed by Timothy Dyce
Registration Number: F2018L01352
Registration Date: 27 September 2018
Related Explanatory Statements:WAN 2018/1 - Explanatory Statement