Goods and Services Tax A NEW TAX SYSTEM (GST TAX) ACT 1999
Goods and Services Tax
A NEW TAX SYSTEM (GST TAX) ACT 1999
Goods and Services Tax (A NEW TAX SYSTEM (GST TAX) ACT 1999) GST registration 23-10 An entity can register for GST if carrying on an enterprise. 23-5; 23-15 Non-profit: ≥ 150,000 Regulations 23-15.01 & 23-15.02 All others: ≥ 75,000 Entities must register for GST is annual turnover exceeds registration turn over threshold. Annual turnover: 188-15 GSTR 2001/17 9-40 Pay GST on taxable supply 11-20 Get input tax credits on creditable acquisition
Taxable supply Taxable supply Section 9-5
Consequence:
9-10
Supply
9-15
Made for consideration
9-40 Companies required to pay GST on taxable supplies
9-20
In the course of furtherance of an enterprise
9-25
Connection to indirect tax zone(Australia 195-1)
23-5; 23-15
By a person registered or should be registered for GST
Division 38
GST-free supplies
Division 40
Input-taxed supplies
9-70 GST payable by the supplier on 10% of the value of the taxable supply 9-75 Value of taxable supply = 10/11 of the price
Fringe benefits tax Fringe Benefits Tax Assessable Act 1986
Fringe benefits tax(Fringe Benefits Tax Assessable Act 1986) FBT Year: April 1 – March 31 s 136(1) Tax is imposed on employer. s 66(1) Announced on Sep. 19, 1985 Came into effect on 01/07/1986 Separate type of tax imposed on the provision of fringe benefits, not receipt of income 1. Identify whether a fringe benefit exists (s 136(1) definition) 2. Check whether it is excluded from the definition of fringe benefit 3. Identify the category of fringe benefit that applies 4. Check whether an exemption applies 5. Determine the taxable value 6. Check if there is a reduction in taxable value 7. Determine whether the FB is a Type 1 or Type 2 benefit 8. Calculate the fringe benefits taxable amount(s 5B) 9. Calculate the FBT liability
Interactions with other taxes
Not AI for employees S 23L(1) ITAA36;
FB = NOT ordinary income = Non-assessable Non-exempt income
s 15-2 ITAA97 s 23L(1A) ITAA36;
Exempt FB = exempt income
s 15-2 ITAA97 Deductible for employers – Employer can claim deduction for FBT + cost of providing the FB s 32-20 ITAA97
Non-deductible expense 32-5 does not stop you deducting expense that you incur it in respect of providing entertainment by way of providing a FB
Residency test ITAA36 / ITAA97
Residency test 995-1 ITAA36 6-5(2) & 6-10(4) 6-5(3) & 6-10(5) 6(1) ITAA36
Australian resident is a person who is a resident of Australia for the purposes of tax Foreign resident is a person who is not a resident of Australia for the purposes of ITAA36 Resident – all ordinary income and statutory income of an Australian resident taxpayer derived directly or indirectly from all sources, whether in or out of Australia, during the income year Non-resident – all ordinary income and statutory income of a foreign resident taxpayer derived directly or indirectly from all Australian sources during the income year and any other amounts specifically included 4 residency test(only need to satisfy one of the tests to be a resident for tax purposes)
Australian tax rate – resident Taxable income $0 - $18,200 $18,201 - $37,000 $37,001 - $80,000 $80,001 - $180,000 Over $180,000
Tax on this income Nil 19 cents for each $1 over $18,200 $3,572 plus 32.5 cents for each $1 over $37,000 $17,547 plus 37 cents for each $1 over $80,000 $54,547 plus 45 cents for each $1 over $180,000
Not including 2% ‘Medicare Levy’ and 2% ‘Budget Deficit Levy’ for income > $180,000
Foreign resident 1. Rate of tax – subject to progressive rate structure; but denied the tax-free threshold; no Medicare Levy, but 2% Temporary Budget Repair Levy for taxable income > 180,000; no CGT discount 2. Collection of tax
No obligation for a country to collect tax on behalf of other country
Active income(business profits and services income) assessed to foreign resident
Australian tax rate – non-resident Taxable income $0 - $80,000 $80,001 - $180,000 Over $180,000
Tax on this income 32.5 cents for each $1 $26,000 plus 37 cents for each $1 over $80,000 $63,000 plus 45 cents for each $1 over $180,000
A NEW TAX SYSTEM (GST TAX) ACT 1999
Goods and Services Tax (A NEW TAX SYSTEM (GST TAX) ACT 1999) GST registration 23-10 An entity can register for GST if carrying on an enterprise. 23-5; 23-15 Non-profit: ≥ 150,000 Regulations 23-15.01 & 23-15.02 All others: ≥ 75,000 Entities must register for GST is annual turnover exceeds registration turn over threshold. Annual turnover: 188-15 GSTR 2001/17 9-40 Pay GST on taxable supply 11-20 Get input tax credits on creditable acquisition
Taxable supply Taxable supply Section 9-5
Consequence:
9-10
Supply
9-15
Made for consideration
9-40 Companies required to pay GST on taxable supplies
9-20
In the course of furtherance of an enterprise
9-25
Connection to indirect tax zone(Australia 195-1)
23-5; 23-15
By a person registered or should be registered for GST
Division 38
GST-free supplies
Division 40
Input-taxed supplies
9-70 GST payable by the supplier on 10% of the value of the taxable supply 9-75 Value of taxable supply = 10/11 of the price
Fringe benefits tax Fringe Benefits Tax Assessable Act 1986
Fringe benefits tax(Fringe Benefits Tax Assessable Act 1986) FBT Year: April 1 – March 31 s 136(1) Tax is imposed on employer. s 66(1) Announced on Sep. 19, 1985 Came into effect on 01/07/1986 Separate type of tax imposed on the provision of fringe benefits, not receipt of income 1. Identify whether a fringe benefit exists (s 136(1) definition) 2. Check whether it is excluded from the definition of fringe benefit 3. Identify the category of fringe benefit that applies 4. Check whether an exemption applies 5. Determine the taxable value 6. Check if there is a reduction in taxable value 7. Determine whether the FB is a Type 1 or Type 2 benefit 8. Calculate the fringe benefits taxable amount(s 5B) 9. Calculate the FBT liability
Interactions with other taxes
Not AI for employees S 23L(1) ITAA36;
FB = NOT ordinary income = Non-assessable Non-exempt income
s 15-2 ITAA97 s 23L(1A) ITAA36;
Exempt FB = exempt income
s 15-2 ITAA97 Deductible for employers – Employer can claim deduction for FBT + cost of providing the FB s 32-20 ITAA97
Non-deductible expense 32-5 does not stop you deducting expense that you incur it in respect of providing entertainment by way of providing a FB
Residency test ITAA36 / ITAA97
Residency test 995-1 ITAA36 6-5(2) & 6-10(4) 6-5(3) & 6-10(5) 6(1) ITAA36
Australian resident is a person who is a resident of Australia for the purposes of tax Foreign resident is a person who is not a resident of Australia for the purposes of ITAA36 Resident – all ordinary income and statutory income of an Australian resident taxpayer derived directly or indirectly from all sources, whether in or out of Australia, during the income year Non-resident – all ordinary income and statutory income of a foreign resident taxpayer derived directly or indirectly from all Australian sources during the income year and any other amounts specifically included 4 residency test(only need to satisfy one of the tests to be a resident for tax purposes)
Australian tax rate – resident Taxable income $0 - $18,200 $18,201 - $37,000 $37,001 - $80,000 $80,001 - $180,000 Over $180,000
Tax on this income Nil 19 cents for each $1 over $18,200 $3,572 plus 32.5 cents for each $1 over $37,000 $17,547 plus 37 cents for each $1 over $80,000 $54,547 plus 45 cents for each $1 over $180,000
Not including 2% ‘Medicare Levy’ and 2% ‘Budget Deficit Levy’ for income > $180,000
Foreign resident 1. Rate of tax – subject to progressive rate structure; but denied the tax-free threshold; no Medicare Levy, but 2% Temporary Budget Repair Levy for taxable income > 180,000; no CGT discount 2. Collection of tax
No obligation for a country to collect tax on behalf of other country
Active income(business profits and services income) assessed to foreign resident
Australian tax rate – non-resident Taxable income $0 - $80,000 $80,001 - $180,000 Over $180,000
Tax on this income 32.5 cents for each $1 $26,000 plus 37 cents for each $1 over $80,000 $63,000 plus 45 cents for each $1 over $180,000
