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:
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: