Goods and Services Tax Advice

GSTA TPP 042W

Goods and services tax: Is a payment to a lawyer by a client to reimburse the lawyer for a payment of a tax, fee, or charge (tax) that is excluded from the GST by a determination of the Treasurer consideration for a taxable supply by the lawyer if the lawyer paid the tax in their own right?

• Please note that the PDF version is the authorised version of this withdrawal notice.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Notice of Withdrawal

Goods and Services Tax Advice GSTA TPP 042 is withdrawn with effect from today.

1. GSTA TPP 042 stated that a client's payment to reimburse a lawyer for a payment of tax, fee or charge forms part of the consideration for the lawyer's taxable supply of services to the client if it was paid for by the lawyer in their own capacity.

2. GSTA TPP 042 is withdrawn because it is no longer accurate. The Treasurer's determination was repealed in 2011 and replaced under subsection 81-5(2) of the A New Tax System (Goods and Services Tax) Act 1999 by regulations 81-10.01 to 81-15.02 of the A New Tax System (Goods and Services Tax) Regulations 1999.

3. Additionally, the Commissioner's view regarding the general GST treatment of reimbursements by clients to lawyers for taxes, fees and charges are contained in paragraphs 48 to 52 of Goods and Services Tax Ruling GSTR 2000/37 Goods and Services Tax: agency relationships and the application of the law.

Commissioner of Taxation
9 July 2014

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Not previously issued as a draft

References

ATO references:
NO 1-5BEHET8

Related Rulings/Determinations:

GSTA TPP 043
TR 2006/10

Subject References:
agency
reimbursement
Division 81
exempt
consideration
tax
fee
charge
legal fees

Legislative References:
ANTS(GST)A 1999 Div 81
ANTS(GST)A 1999 Subdiv 153-A
TAA 1953 Sch 1 Div 358

Other References:
Legal fees and charges - fact sheet
A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2004 (No. 2)