ATO Interpretative Decision

ATO ID 2013/9

Goods and Services Tax

GST and registration of a representative of an incapacitated entity when the incapacitated entity is neither registered nor required to be registered

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can the representative of an incapacitated entity register, under section 23-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), in its capacity as the representative of the incapacitated entity if the incapacitated entity is neither registered nor required to be registered for GST?

Decision

No. The representative cannot register under section 23-10 of the GST Act in its capacity as the representative of the incapacitated entity if the incapacitated entity is neither registered nor required to be registered for GST.

Facts

The representative of an incapacitated entity, in its capacity as representative, carries on an enterprise. However, it is not required to be registered in that capacity under section 23-5 of the GST Act.

The incapacitated entity is neither registered nor required to be registered.

Reasons for Decision

Section 23-10 of the GST Act provides that an entity may register for GST if it is carrying on an enterprise or intends to carry on an enterprise.

While an entity may register under section 23-10 of the GST Act if it is carrying on an enterprise or intends to carry on an enterprise, subsection 58-25(1) of the GST Act provides that the registration of a representative of an incapacitated entity must be cancelled if the Commissioner is satisfied that the representative is not required to be registered in that capacity.

The representative is not required to be registered as representative of the incapacitated entity under section 23-5 of the GST Act.

The representative is also not required to be registered under subsection 58-20(1) of the GST Act, which provides that a representative of an incapacitated entity is required to be registered in that capacity if the incapacitated entity is registered or required to be registered. This is because the incapacitated entity here is neither registered nor required to be registered for GST.

As the representative is not required to be registered as representative of the incapacitated entity, the application of subsection 58-25(1) of the GST Act would mean that the representative cannot register in that capacity under section 23-10 of the GST Act.

Notes:

1.
If the incapacitated entity is still carrying on an enterprise, the incapacitated entity or through its authorised agent may register under section 23-10 of the GST Act, and this would require the representative entity to be registered because of subsection 58-20(1) of the GST Act.
2.
If the representative is not carrying on an enterprise in its capacity as a representative of an incapacitated entity, it may not register in that capacity under section 23-10 of the GST Act.
3.
This ATO ID replaces ATO ID 2003/1063, which dealt with former Division 147 of the GST Act which was repealed on 4 December 2009.

Date of decision:  7 February 2013

Year of income:  Periods including and after 4 December 2009

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 23-5
   section 23-10
   subsection 58-20(1)
   subsection 58-25(1)

Case References:
Deputy Commissioner of Taxation v PM Developments Pty Ltd
   [2008] FCA 1886

Related ATO Interpretative Decisions
ATO ID 2003/1063 (withdrawn)

Keywords
Goods and services tax
GST registration
Registration cancellation
Required to be registered
GST special rules
Representative of incapacitated entities

Siebel/TDMS Reference Number:  1-4DG8H6X

Business Line:  Indirect Tax

Date of publication:  15 February 2013

ISSN: 1445-2782