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Posts Tagged GST


GST on property developments involving government

06th Feb, 2019

The ATO says it is reviewing arrangements involving property developers acquiring land from government entities, specifically where the developer provides development works to the government entity as payment for the land. The ATO is concerned that some developers and government entities are not reporting the value of their supplies under these arrangements in a consistent manner, resulting in GST being underpaid.

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GST: supplies of real property connected with Australia

12th Sep, 2018

GST Ruling GSTR 2018/1, issued on 22 August 2018, sets out the ATO’s view on when supplies of real property are connected with the indirect tax zone (Australia).

It states that a supply of real property is connected with Australia if the real property, or the land to which it relates, is in Australia. The ATO stresses that the test is the physical land’s location, not the location of the interest or right over the land. The supply of a right to accommodation in Australia also constitutes the supply of real property connected with Australia.

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Government launches new service to simplify business registrations

15th Aug, 2018

The government has officially launched a new stand-alone Business Registration Service, providing a simpler and clearer way to register a business. The service is available at www.business.gov.au.

The service can be used for things such as applying for an Australian Business Number (ABN) or goods and services tax (GST) registration. It is for people starting a new business as a sole trader, company, partnership, trust or superannuation fund. Existing businesses with an ABN can also use the service to apply for tax registrations such as GST.

The Business Registration Service has reduced the average time taken to obtain a business and associated licences to under 15 minutes.

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GST exemption for offshore sellers of hotel bookings to be removed: draft legislation released

15th Aug, 2018

The Treasurer has released draft legislation to ensure offshore sellers of hotel accommodation in Australia calculate their GST turnover in the same way as local sellers from 1 July 2019.

Under the proposed changes, offshore suppliers of rights to use commercial accommodation (eg hotels) in the indirect tax zone (broadly, Australia) will be required to include these supplies in working out their GST turnover. If the supplier’s GST turnover equals or exceeds the registration turnover threshold, GST must be remitted for supplies that are taxable supplies.

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GST property settlement online forms available

10th Jul, 2018

From 1 July 2018, purchasers of newly constructed residential properties or new subdivisions must pay the related GST directly to the ATO as part of the settlement.

The ATO says property transactions of new residential premises or potential residential land that involve GST to be paid directly to the ATO on or before settlement will require purchasers or their representatives to use the following online forms:

  • Form one, GST property settlement withholding notification, is used to advise the ATO that a contract has been entered into for new residential premises or potential residential land that requires a withholding amount. This form can be submitted any time after a contract has been entered into and prior to the settlement date.
  • Form two, GST property settlement date confirmation, is used to confirm the settlement date and can be submitted at the time of settlement and when the payment has been made to the ATO.

Depending on which state or territory the property is acquired in, the purchaser’s representative can include a conveyancer or a solicitor.

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Businesses

20th Jun, 2018

Lower company tax rates and imputation

Company tax rates are falling in Australia. Companies carrying on a business with turnover of less than $25 million will pay a rate of 27.5% in 2018 – the rate of 30% only applies if turnover is $25 million or more,
or the company is not carrying on a business.

By 2027, the tax rate will reach a low of 25% for companies carrying on a business with turnover up to $50 million.

TIP: The dividend franking rate for 2018 may be different from a company’s tax rate, depending on whether turnover in 2017 was less than the current year’s turnover benchmark ($25 million for 2018).

Deductions for small business entities

Small business entities (companies, trusts, partnerships or sole traders with total turnover of less than $10 million) will qualify for a raft of tax concessions in the 2018 income tax year:

  • the $20,000 instant asset write-off – an immediate deduction when buying and installing depreciating assets that cost less than $20,000.
  • the simplified depreciation rules – accelerated depreciation rates of 15% or 30% for depreciable assets that cost $20,000 or more;
  • the small business restructure rollover;
  • an immediate deduction for start-up costs;
  • an immediate deduction for certain prepaid expenses;
  • the simplified trading stock rules – removing the need to do an end-of-year stocktake if stock value has changed by less than $5,000;
  • the simplified PAYG rules – the ATO will calculate PAYG instalments;
  • cash basis accounting for GST – the ATO will calculate the GST instalment payable and annual apportionment for
  • input tax credits for acquisitions that are partly creditable;

  • the FBT car parking exemption (from 1 April 2017); and
  • the ability for employees to salary-sacrifice two identical portable electronic devices (from 1 April 2016).
  • These concessions are very powerful for small businesses, and can lead to substantial tax savings.

    Small business CGT concessions

    If you’re selling a business that has an aggregated turnover of less than $2 million (a “CGT small business entity”) or the value of its net CGT assets is $6 million or less (it satisfies the $6 million “net asset value” test), you may be able to access the small business CGT concessions.

    These concessions include:

    • a 15-year exemption – no CGT is payable;
    • a 50% active asset reduction – a 50% CGT discount in addition to the 50% general discount;
    • the retirement exemption – up to $500,000 lifetime tax-free limit; and
    • the active asset rollover – minimum two years’ deferral.

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