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As we have seen, an entity is required to register if its “GST turnover” is $75,000 or more. This means that it must register if either of the following applies:
- Its current GST turnover is $75,000 or more, except if the Tax Office is satisfied that the projected GST turnover is below $75,000; or
- Its projected GST turnover is $75,000 or more.
If you are a non-profit body, the corresponding threshold is $150,000. Under the income tax law, a non-profit body must not be carried on for the purposes of profit or gain to its individual members. In addition, its constitution must prohibit a distribution of profits or assets among members of the organisation during its lifetime or on its winding up.
Current turnover is calculated by adding up the value of all the supplies you have made, or are likely to make, during the 12-month period ending at the end of the current month. Projected turnover is calculated by adding up the value of all the supplies you have made, or are likely to make, during the 12-month period starting at the beginning of the current month.
At any particular time, your current GST turnover is measured over the 12-month period ending at the end of the current month. Your projected GST turnover is measured over the 12-month period starting at the beginning of the current month
In each case, the value does not include the GST component of the supplies. In working out the value, you also exclude supplies that normally would not give rise to GST in any event. This means that you exclude:
- Supplies that are input taxed, eg financial supplies
- Supplies where there is no consideration paid, unless they are made to associates;
- Supplies that are not made in connection with your business or enterprise; and
- Supplies that are not connected with Australia.
Insurance payouts are also disregarded when working out turnover. If the supply is a loan of money, the value for turnover purposes is normally the amount of the loan. If you are a member of a GST group you also exclude supplies made between members. When working out projected turnover, you should not take into account transfers of capital assets, or any transfers associated with closing down the business or substantially and permanently reducing its size or scale donations may also be ignored.
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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.