Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act 2016 (52 of 2016)
Schedule 2 GST treatment of cross-border transactions between businesses
Part 1 Cross-border supplies that are not connected with the indirect tax zone
A New Tax System (Goods and Services Tax) Act 1999
3 After section 9-25
Insert:
9-26 Supplies by non-residents that are not connected with the indirect tax zone
(1) A supply is not connected with the indirect tax zone if:
(a) the supplier is a *non-resident; and
(b) the supplier does not make the supply through an *enterprise that the supplier *carries on in the indirect tax zone; and
(c) the supply is covered by an item in this table:
|
Offshore supplies that are not connected with the indirect tax zone |
||
|---|---|---|
|
Item |
Topic |
These supplies are not connected with the indirect tax zone … |
|
1 |
Inbound intangible supply |
a supply of anything other than goods or *real property if: (a) the thing is done in the indirect tax zone; and (b) the *recipient is an *Australian-based business recipient of the supply. |
|
2 |
Intangible supply between non-residents |
a supply of anything other than goods or *real property if: (a) the thing is done in the indirect tax zone; and (b) the *recipient is a *non-resident that acquires the thing supplied solely for the purpose of an *enterprise that the recipient *carries on outside the indirect tax zone. |
|
3 |
Supply between non-residents of leased goods |
a supply by way of transfer of ownership of leased goods if: (a) the *recipient is a *non-resident that does not acquire the thing supplied solely or partly for the purpose of an *enterprise that the recipient *carries on in the indirect tax zone; and (b) the lessee: (i) made a *taxable importation of the goods before the supply was made; and (ii) continues to lease the goods on substantially similar terms and conditions after the supply is made. |
|
4 |
Supply by way of continued lease of goods from item 3 |
a supply made by way of lease if: (a) the *recipient is the lessee referred to in paragraph (b) of item 3 of this table; and (b) the lease is the lease referred to in subparagraph (ii) of that paragraph. |
Note: This subsection does not apply to supplies made by a non-resident through a resident agent if they have agreed it is not to apply: see section 57-7.
(2) An entity is an Australian-based business recipient ofa supply made to the entity if:
(a) the entity is *registered; and
(b) an *enterprise of the entity is *carried on in the indirect tax zone; and
(c) the entity's acquisition of the thing supplied is not solely of a private or domestic nature.
Note: If a supply is not connected with the indirect tax zone, the Australian-based business recipient may be subject to a reverse charge: see Subdivision 84-A.
(3) This section applies despite sections 9-25 (which is about when supplies are connected with the indirect tax zone) and 85-5 (which is about telecommunication supplies).
9-27 When enterprises are carried on in the indirect tax zone
(1) An *enterprise of an entity is carried on in the indirect tax zone if:
(a) the enterprise is *carried on by one or more individuals covered by subsection (3) who are in the indirect tax zone; and
(b) any of the following applies:
(i) the enterprise is carried on through a fixed place in the indirect tax zone;
(ii) the enterprise has been carried on through one or more places in the indirect tax zone for more than 183 days in a 12 month period;
(iii) the entity intends to carry on the enterprise through one or more places in the indirect tax zone for more than 183 days in a 12 month period.
(2) It does not matter whether:
(a) the entity has exclusive use of a place; or
(b) the entity owns, leases or has any other claim or interest in relation to a place.
(3) This subsection covers the following individuals:
(a) if the entity is an individual - that individual;
(b) an employee or *officer of the entity;
(c) an individual who is, or is employed by, an agent of the entity that:
(i) has, and habitually exercises, authority to conclude contracts on behalf of the entity; and
(ii) is not a broker, general commission agent or other agent of independent status that is acting in the ordinary course of the agent's business as such an agent.
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