Goods and Services Tax (GST)
GST reform measures deferred
The Government has announced that it will defer the start date for a number of components of the 2009-10 budget measure, which implements the recommendations of the Board of Taxation's review of the legal framework for the administration of the GST.The following measures, that were to commence from 1 July 2011, will now take effect from the first quarterly tax period after Royal Assent (or where appropriate, a later quarterly tax period):
- Adoption of the income tax self assessment regime for indirect taxes and refreshing the period of review.
- Reform of the change of use adjustments.
- Allowing adjustments for pre-registration acquisitions.
- Clarifying the treatment of tax law partnerships.
- Simplifying the GST group membership rules, including grandfathering of current membership rules and allowing grouping of non-operating holding companies and trusts.
- Amending the indirect tax sharing agreement provisions.
- Introducing a reverse charge for supplies of going concerns and farmland.
The Government has also announced that it will not proceed at this stage with the option to treat certain business-to-business supplies as taxable. This measure was scheduled to take effect on 1 July 2010. The deferral is intended to enable more extensive consideration of the possible wider use of reverse charging or GST-free business-to-business transactions.
GST treatment of property in possession of a mortgagee
The Government has announced that it will amend the GST law, with effect from 1 July 2012, to clarify its operation and reduce compliance costs for the mortgage lending sector.In particular, the measure will clarify that the provisions, which make a creditor liable for GST on supplies of a debtor's property (where the supply is in satisfaction of a debt owed to the creditor) will operate to the exclusion of the special rules concerning representatives of incapacitated entities in circumstances where a mortgagee in possession or control sells the property of a corporation. The effect of this proposed measure is that such mortgagees will be able to continue to report and account for their GST obligations under a single GST registration.
