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Special Rules and Concessions
Some special rules and concessions that have not already been covered are set out below in alphabetical order.
A principal and an agent (or intermediary) 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.
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.
The Commissioner has wide powers to cancel GST benefits that arise from contrived schemes and may also impose substantial penalties.
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 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 and choice of accounting basis. 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 fundraising activities input taxed.
Commercial residential premises
Special rules apply where commercial residential premises, such as caravan parks, are rented out on a long-term basis (i.e., for more than 28 days).
Deposits taken as security for performance of an obligation are not subject to GST if the obligation is performed.
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.
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.
Certain groups of companies, trusts, partnerships or individuals 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.
The GST is payable by the importer rather than the overseas supplier.
Detailed rules apply to premiums and payouts. The GST treatment varies according to the type of insurance involved.
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.
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 are subject to GST on redemption rather than on the original acquisition.
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.
If a non-resident acts through an agent resident in Australia, the agent is responsible for the GST consequences.
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.
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.
Departing 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.
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The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.