Special Rules and Concessions

Some special rules and concessions that have not already been covered are set out below in alphabetical order.

Agents

A principal and an agent can agree that the agent should be treated as a principal for GST purposes. If a non-resident acts through an agent resident in Australia, the agent is responsible for the GST consequences.

Associates

Special rules apply if you supply something to an associate at a price below market value, or as a gift. The supply will be treated as if it had been for market value, unless the associate would have been entitled to a full input tax credit. An associate includes a relative, business partner, entities in trustee /beneficiary relationships, and companies and their controllers.

Avoidance

The Commissioner has wide powers to cancel GST benefits that arise from contrived schemes and may also impose substantial penalties.

Branches

Special rules allow you to register your business branches separately. This procedure is intended to avoid the administrative and accounting costs of having to amalgamate branch accounts every tax period.

Charities

Charities and non-profit bodies are generally subject to GST on their commercial activities, but their non-commercial activities will be GST free. They are also entitled to concessions on registration, choice of accounting basis and choice of tax periods. They may also arrange for their operations to be split into separate independent units for GST purposes, may claim the benefit of simplified accounting methods, and may choose to have their fund-raising activities input taxed.

Commercial residential premises

Special rules apply where commercial residential premises are rented out on a long-term basis (i.e., for more than 28 days).

Deposits

Deposits taken as security for performance of an obligation are not subject to GST if the obligation is performed.

Financial suppliers

Financial suppliers who would normally be input taxed may be able to claim partial input tax credits for certain outsourced services. Input tax credits may also be claimed where the financial supplier does not exceed the specified threshold or in certain borrowing transactions.

Gambling

Special rules for calculating GST apply if you provide gambling services. These include selling tickets in lotteries or raffles, or accepting bets on races, games, sporting events or any other events.

Groups

Certain groups of companies, trusts or partnerships can be treated as a single taxpayer for GST purposes. This means that purely internal transactions within the group do not have any GST consequences. One member of the group - the representative member - is responsible for lodging returns.

Importations

The GST is payable by the importer rather than the overseas supplier.

Insurance

Detailed rules apply to premiums and payouts. The GST treatment varies according to the type of insurance involved.

Joint ventures

Bodies engaged in specified types of joint venture can have it approved for GST purposes. This will mean that the operator of the venture is responsible for the GST liabilities and entitlements arising from the operators dealings on behalf of the venture participants.

Pre-establishment costs

A company may be entitled to input tax credits for acquisitions and importations made before it was incorporated.

Property dealers and developers

These can use a "margin scheme" that allows them to calculate their GST liabilities as 1/11th of the difference between the tax-inclusive sale price and the original purchase price. Special rules apply to real estate held at 1 July 2000.

Redeemable vouchers

Redeemable vouchers are subject to GST on redemption rather than on the original acquisition.

Reimbursements

In certain circumstances, input tax credits can be claimed where employees and others are reimbursed for expenses they incur in the course of their duties.

Resident agents

If a non-resident acts through an agent resident in Australia, the agent is responsible for the GST consequences.

Reverse charge

Certain services or rights provided from outside Australia may be caught by GST even though they are not made through an Australian business of the supplier. In these cases, the GST is payable by the recipient, not by the provider. This "reverse charging" overcomes the fact that the supplier will often not be within the Australian GST system. Reverse charging can also apply where general taxable supplies are made by non-residents, if both parties agree.

Second-hand goods

In certain cases, dealers will be able to claim input tax credits on second-hand goods even though the person who supplied them with the goods was not registered for GST purposes. A global method of accounting for GST and input tax credits on second-hand goods may be available in certain circumstances.

Small business entities

Taxpayers that qualify as small business entities can claim various concessions such as cash accounting, annual apportionment of input tax credits and payment of GST by instalments. small business entities are those whose annual income, when aggregated with the income of other related bodies, is less than $2 million.

Tourist refunds

Visiting tourists may be entitled to refunds of GST paid on purchases that they take home with them.

Our dedicated team can assist you with all your accounting and GST related matters. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.