ATO Interpretative Decision
ATO ID 2001/688 (Withdrawn)
Goods and Services Tax
GST and cash distribution by a liquidatorFOI status: may be released
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This ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a liquidator, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it makes a cash distribution to a shareholder as part of winding up a company?
Decision
No, the entity is not making a taxable supply under section 9-5 of the GST Act when it makes a cash distribution to a shareholder as part of winding up a company.
Facts
The entity is a liquidator. The entity makes a cash distribution to a shareholder of a company that is being wound up.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under section 9-5 of the GST Act, an entity makes a taxable supply if:
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- the entity makes a supply for consideration; and
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- the supply is in the course or furtherance of an enterprise that the entity carries on; and
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- the supply is connected with Australia; and
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- the entity is registered or required to be registered for GST.
'Supply' is defined in section 9-10 of the GST Act to mean any form of supply whatsoever. However, subsection 9-10(4) of the GST Act provides that a supply does not include a supply of money unless the money is provided as consideration for a supply that is a supply of money. The entity is not providing the cash distribution as consideration for a supply of money. Therefore, the entity is not making a supply as defined in section 9-10 of the GST Act.
As the entity is not making a supply, the entity is not making a taxable supply under section 9-5 of the GST Act when it makes a cash distribution to a shareholder.
Date of decision: 4 October 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
section 9-10
subsection 9-10(4)
Keywords
Goods & services tax
GST supplies & acquisitions
GST supply
ISSN: 1445-2782
| Date: | Version: | |
| 4 October 2001 | Original statement | |
| You are here | 10 February 2006 | Archived |