House of Representatives

Tax Laws Amendment (2010 GST Administration Measures No. 2) Bill 2010

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan MP

Glossary

The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation Definition
ABN Australian Business Number
ATO Australian Taxation Office
BAS business activity statement
Commissioner Commissioner of Taxation
Excise Act Excise Act 1901
GST goods and services tax
GST Act A New Tax System (Goods and Services Tax) Act 1999
GST Regulations A New Tax System (Goods and Services Tax) Regulations 1999
ITAA 1997 Income Tax Assessment Act 1997
LCT luxury car tax
TAA 1953 Taxation Administration Act 1953
WET wine equalisation tax

General outline and financial impact

GST groups and GST joint ventures

Schedule 1 to this Bill amends:

·
the A New Tax System (Goods and Services Tax) Act 1999 ( GST Act) and the Taxation Administration Act 1953 ( TAA 1953) to allow entities to self assess their eligibility to form, change and dissolve a goods and services tax (GST) group or GST joint venture and to do so at any time during a tax period; and
·
the TAA 1953 and the GST Act to allow members of a GST group and participants in a GST joint venture to enter into an indirect tax sharing agreement with a representative member or a joint venture operator respectively in relation to their indirect tax law liabilities.

Date of effect: These amendments apply to tax periods starting on or after 1 July 2010.

Proposal announced: This measure was announced in the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs' Media Release No. 042 of 12 May 2009.

Financial impact: The self assessment and intra-tax period grouping and de-grouping amendments will have nil impact on revenue. The indirect tax sharing agreements amendments will have a negligible cost to GST revenue.

Compliance cost impact: These amendments are expected to result in a low overall compliance cost impact, comprised of a low implementation impact and a low decrease for ongoing compliance costs relative to the affected group.

Adopting the general rulings system for indirect taxes and excise

Schedule 2 to this Bill amends the Taxation Administration Act 1953, the A New Tax System (Goods and Services Tax) Act 1999, the Excise Act 1901 and the Income Tax Assessment Act 1997 to include indirect tax rulings and excise advice in the general rulings regime.

Date of effect: These amendments apply to rulings made by the Commissioner of Taxation on or after 1 July 2010. They also apply to private indirect tax rulings that have been applied for, or that are in operation immediately before 1 July 2010, and public indirect tax rulings that are gazetted or labelled as public rulings and are in operation immediately before 1 July 2010.

Proposal announced: These amendments were announced in the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs' Media Release No. 042 of 12 May 2009.

Financial impact: These amendments will have an unquantifiable, but expected to be small impact on the goods and services tax, the wine equalisation tax, the luxury car tax and excise revenue.

Compliance cost impact: Low; the change brings the treatment of indirect tax and excise rulings into line with the existing rules for the broader rulings regime.

Tax invoices

Schedule 3 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to simplify the requirements for a document to be a tax invoice.

Date of effect: These amendments apply from 1 July 2010.

Proposal announced: These amendments were announced in the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs' Media Release No. 042 of 12 May 2009.

Financial impact: These amendments have an unquantifiable, but expected to be small, cost to annual goods and services tax revenue.

Compliance cost impact: Low. These amendments reduce compliance costs by eliminating the need to seek further documents for many minor omissions in tax invoices. However, only a limited number of taxpayers are affected as only a small proportion of the total number of tax invoices issued contain such errors.

These amendments also have a minimal transitional impact. No changes to existing systems or behaviour are required.