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Edited version of private ruling

Authorisation Number: 1011640172197

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Ruling

Subject: GST and decreasing adjustments for insurance

Questions:

The Ruling concerned whether:

1. X is entitled to claim a decreasing adjustment equal to 1/11th of the settlement costs incurred as a result of the policy arrangements with the specific clients and an overseas representative in Australia?

2. Will the facts in this case be sufficient to substantiate the Australian insurer's entitlement to the above mentioned decreasing adjustments - that is, will the Commissioner of Taxation (Commissioner) confirm that no further enquires are required to be made by the Australian insurer?

Advice/Answers:

The Commissioner ruled that:

Issue 1

X is entitled to claim a decreasing adjustment as a result of the policy arrangements with the specific clients and the overseas representative in Australia.

Issue 2

X should request or make reasonable attempts to request the input tax credit entitlement information from the entity to which the supply is made, being the overseas representative in Australia (for example, as a question on a claim form or declaration). However, it is noted that X has established that the overseas representative in Australia is not registered for GST and that the overseas representative in Australia is not entitled to claim input tax credits (as per reasons to Issue 1). This is sufficient to substantiate the overseas representative in Australia entitlement to the decreasing adjustments.

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