GST law changes: Impact for Australian residents

GST law changes: Impact for Australian residents

The rules for GST-free supply may be about to change. Alison Marshall, Indirect Tax Specialist, analyses the potential impact.

Director, Tax

KPMG Australia

Contact

Related content

Woman shopper in retail store

While the proposed legislative changes in Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016 are clearly targeted at non-residents, the proposed changes to the goods and services tax (GST) free provisions also affect Australian resident suppliers.

Under the current law a supply (of something other than goods and real property) to a non-resident, that otherwise meets the requirements to be GST-free, is prevented from being GST-free where it is provided (or required to be provided) to another entity in Australia.

Broadly, under the proposed law changes a supply will be GST-free if the other entity (to which the supply is provided) is:

  • registered for GST and makes the acquisition in carrying on its enterprise in Australia
  • an employee or officer of an entity that is registered for GST and makes the acquisition in carrying on its enterprise in Australia
  • an employee or officer of a recipient, where the recipient makes the acquisition for a creditable purpose.

Many of the circumstances where GST currently applies to supplies to non-residents will, after the change of law, be GST-free. For example, an engagement with the global head office (outside Australia) that includes the provision of services to an Australian subsidiary will, following the change, be GST-free.

Now is the time to look at:

  • agreements with non-residents that are currently treated as taxable to confirm whether they will be GST-free going forward
  • systems and processes to determine whether GST coding changes are required.

Tax Insights

KPMG Australia's analysis of tax issues and developments.

 
Read more

Indirect Tax Services

Indirect Tax Services

KPMG can assist in all aspects of indirect tax, from education and training, policy, compliance and technology through to audits and disputes.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform