A New Tax System (Goods and Services Tax) Regulations 1999 (repealed)

Part 4-2 - Special rules mainly about supplies and acquisitions  

Division 70 - Financial supplies (reduced credit acquisitions)  

70-5.02   Acquisitions that attract reduced input tax credits: general (Act s 70-5)  

(1)  
For subsection 70-5(1) of the Act, an acquisition mentioned in subregulation (2) that relates to making financial supplies gives rise to an entitlement to a reduced input tax credit.

(2)  
The following acquisitions (within the meaning of subsection 70-5(1) of the Act) are reduced credit acquisitions:


Item Reduced credit acquisition
Transaction banking and cash management services
1 The service of opening, issuing, closing, operating, maintaining, or performing a transaction in respect of an account by a financial supply facilitator, including by using the following facilities:
(a)   telephone banking;
(b)   Internet banking;
(c)   GiroPost
2 Processing services in relation to account information for account providers, including:
(a)   archives storage, retrieval and destruction services; and
(b)   statement processing and bulk mailing; and
(c)   processing and manipulation of information relating to accounts,
    including information about transactions to which item 7 applies
3 Acquisition of transaction cards by card account providers
4 Acquisition of passbooks, deposit and withdrawal forms and cheques and chequebooks by account providers
5 Processing services in relation to account applications for account providers, including providing credit reference and credit scoring assessment
Payment and fund transfers services
6 Supplies to which the following payment system fees relate:
(a)   fees charged by the operator of a payment system to a participant
    in the system;
(b)   fees charged by a participant in a payment system to a third party
    in relation to access to the system;
(c)   fees charged between participants in a payment system
7 Processing, settling, clearing and switching transactions of the following kinds:
(a)   direct credit and debit;
(b)   other credit and debit transactions;
(c)   charge, credit and debit card transactions;
(d)   cheque;
(e)   electronic funds transfer;
(f)   ATM;
(g)   B-pay;
(h)   Internet banking;
(i)   GiroPost;
(j)   the SWIFT (Society for Worldwide Interbank Financial
    Telecommunications) Payment Delivery System
8 Services to a third party mentioned in paragraph 6(b), including:
(a)   processing of account data; and
(b)   electronic payment services
Securities transactions services
9 Arrangement, by a financial supply facilitator, of the provision, acquisition or disposal of an interest in a security, including the following:
(a)   order placement and trade execution;
(b)   clearance and settlement of trades;
(c)   management of the issue of securities, including rights and bonus
    issues;
(d)   arranging flotations and privatisations;
(e)   arranging mergers and acquisitions;
(f)   arranging takeover bids;
(g)   performing a settlement, including issue of drafts and
    encashment;
(h)   other securities transactions, including lodgment, withdrawal
    and exchange control;
(i)   underwriting, except a matter that is described in the table in
    regulation 40-5.09
10 Securities and unit registry services to securities and unit issuers, including:
(a)   managing portfolios of assets; and
(b)   allotting of share issues; and
(c)   making dividend payments; and
(d)   receiving application for issue of shares; and
(e)   performing a redemption or capital repayment; and
(f)   placing scrip orders; and
(g)   bonus issue; and
(h)   scrip settlement; and
(i)   client account processing; and
(j)   transaction processing and recording; and
(k)   handling investor inquiries
Loans services
11 The following supplies by a financial supply facilitator:
(a)   loan agency services;
(b)   provision of a loan facility;
(c)   mortgage broking;
(d)   arranging syndicated loans;
(e)   introducing and broking
12 Lenders mortgage and title insurance
12A Lenders mortgage reinsurance
13 Loan protection insurance
14 The following loan application, management and processing services:
(a)   loan origination and brokerage;
(b)   settlement and discharge of loans, including document
    preparation;
(c)   registration of loan documents;
(d)   credit reference assessment and credit scoring analysis;
(e)   valuations;
(f)   property title searches;
(g)   registration and certification of titles;
(h)   mortgage variations, including name changes;
(i)   adding and deleting caveats to titles
15 The following loan management services:
(a)   processing of repayments;
(b)   statement preparation;
(c)   filing and requisitioning of loan file records
Credit union services
16 Supply to a credit union by:
(a)   an entity that is wholly owned by 2 or more credit unions; or
(b)   an entity that is wholly owned by an entity mentioned
    in paragraph (a)
Debt collection services
17 The following debt collection services:
(a)   debt recovery;
(b)   litigation;
(c)   lodgment of documents;
(d)   by financial supply facilitator, managing the recovery of sums due
    by borrowers
Asset based finance services
18 Arrangement by a financial supply facilitator of hire purchase to which item 8 in the table in regulation 40-5.09 applies
Trade finance services
19 Trade finance transaction processing and recording
20 Trade finance remittance services
Capital markets and financial instruments services
21 Arrangement by a financial supply facilitator of:
(a)   the supply of a derivative or the currency of a foreign country, or
    an agreement to buy or sell the currency; or
(b)   the sale of a forward contract; or
(c) the supply of digital currency, or an agreement to buy or sell digital currency
22 Transaction processing, account maintenance and report generation services provided to:
(a) suppliers of derivatives; or
(b) suppliers of the currency of a foreign country, or an agreement to buy or sell the currency; or
(c) suppliers of digital currency, or an agreement to buy or sell digital currency
Funds management services
23 The following investment portfolio management functions, including those functions for superannuation schemes:
(a)   management of a client ' s asset portfolio;
(b)   management of an investment portfolio for a trust or
    superannuation fund;
(c)   acting as a trustee of a trust or superannuation fund;
(d)   acting as a single responsible entity;
(e)   asset allocation services
24 The following administrative functions in relation to investment funds, including those functions for superannuation schemes:
(a)   maintaining member and employer and trustee records and
    associated accounting;
(b)   processing of applications, contributions, benefits and
    distributions;
(c)   processing transfer between funds and trusts;
(d)   production and distribution of reports, statements and forms to
    members, employers and trustees;
(e)   handling of inquiries and complaints made by members;
(f)   archives storage, retrieval and destruction services;
(g)   statement processing and bulk mailing;
(h)   compliance with industry regulatory requirements, excluding
    taxation and auditing services;
(i)   processing and assessing claims under life insurance policies
    carried out on or after 1 July 2012
Insurance services
25 Brokerage of general or life insurance
26 The following life insurance administration services provided for a life insurer:
(a)   maintaining policyholder records and associated accounting;
(b)   processing of premiums and benefits;
(c)   processing and assessing claims under policies;
(d)   production and distribution of reports, statements and forms to
    policyholders, including statement processing and bulk handling;
(e)   handling of inquiries and complaints made by policyholders;
(f)   archives storage, retrieval and destruction services;
(g)   processing and assessing applications;
(h)   compliance with industry regulatory requirements, excluding
    taxation and auditing services;
(i)   managing reinsurance requirements
Services remunerated by commission and franchise fees
27 Supplies for which financial supply facilitators are paid commission by financial supply providers
28 Supplies provided by financial supply facilitators to franchisors, for which the facilitators are paid a franchise fee
Trustee and custodial services
29 Trustee and custodial services (except safe custody of money, documents and other things), including:
(a)   transfer of cash without purchase, sale or transfer of assets,
    excluding cash delivery and collection from branches of
    Australian ADIs; and
(b)   undertaking and settling of securities transactions by a financial
    supply facilitator; and
(c)   collecting income and other payments; and
(d)   registration of interests and rights; and
(e)   proxy voting; and
(f)   exercise of options and warrants; and
(g)   opening and maintaining accounts with Australian ADIs;
(h)   nominee services in relation to financial supplies
30 The following master custody services:
(a)   maintenance of accounting records;
(b)   taxation reporting;
(c)   mandate monitoring;
(d)   trade execution monitoring;
(e)   portfolio performance analysis;
(f)   risk management reporting
31 Single responsible entity services
Supplies to recognised trust schemes
32 Supplies acquired by a recognised trust scheme, to the extent that:
(a)   the supplies are acquired on or after 1 July 2012; and
(b)   the supplies acquired are not:
    (i) a supply by way of sale of goods or supply of real property
      made by:
      (A) selling a freehold interest in land; or
      (B) selling a stratum unit; or
      (C) granting or selling a long-term lease; or
    (ii) a brokerage service covered by item 9 or 21; or
    (iii) a service covered by paragraph (a), (b) or (e) of item 23; or
    (iv) a service covered by paragraph (a), (b), (c), (d), (e), (f), (g)
        or (i) of item 24; or
    (v) a custodial service covered by item 29; or
    (vi) a service covered by item 30; or
    (vii) a service covered by item 33
Monitoring services
33 Monitoring and reporting services (other than taxation and auditing
services) that:
(a)   are acquired on or after 1 July 2012; and
(b)   are required for compliance with the Anti-Money Laundering
    and Counter-Terrorism Financing Act 2006

(3)  
However, something that is used in making a reduced credit acquisition is not, for that reason, a reduced credit acquisition.

Examples for subregulation (3)

  • 1 Information technology services used for brokerage services
  • 2 Labour hire services used for life insurance administration services
  • (4)  
    For this regulation:

    debt interest
    has the same meaning as in the Income Tax Assessment Act 1997 .

    long-term lease
    - see the Dictionary in Part 6-3 of the Act.

    managed investment scheme
    has the same meaning as in the Corporations Act 2001 .

    mortgage loan
    means a loan secured by a mortgage over real property.

    mortgage scheme
    means a managed investment scheme that has at least 50% of its non-cash assets invested in mortgage loans or in one or more other mortgage schemes.

    real property
    - see the Dictionary in Part 6-3 of the Act.

    recognised trust scheme
    means a trust that has the following features:


    (a) the entity that acts in the capacity as trustee or responsibility entity of the trust, is carrying on, in its own capacity, an enterprise that includes making taxable supplies to the trust;


    (b) the trust is:


    (i) a managed investment scheme, or part of a managed investment scheme, other than a securitisation entity or a mortgage scheme; or

    (ii) an approved deposit fund within the meaning of the Superannuation Industry (Supervision) Act 1993 ; or

    (iii) a pooled superannuation trust within the meaning of the Superannuation Industry (Supervision) Act 1993 ; or

    (iv) a public sector superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993 ; or

    (v) a regulated superannuation fund (other than a self managed superannuation fund) within the meaning of the Superannuation Industry (Supervision) Act 1993 .

    securitisation entity
    means a trust that has the following features:


    (a) the trust was established for the purpose of managing some or all of the economic risk associated with assets, liabilities or investments (whether the trust assumes the risk from another person or creates the risk itself);


    (b) the total value of the debt interests in the trust is at least 50% of the total value of the trust ' s assets;


    (c) the trust is an insolvency-remote special purpose entity according to criteria of an internationally recognised rating agency that are applicable to the circumstances of the trust (regardless of whether the agency has determined that the trust satisfies the criteria).

    stratum unit
    - see the Dictionary in Part 6-3 of the Act.


     

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