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More about Australia's GST
Business Expenses
Business travellers to Australia pay GST on most goods and
services. For example, Australian hotel costs, conference fees and
taxi fares all include GST. Invoices for these expenses will show
that GST has been charged. Contact EasyGSTrefunds to let us help
arrange for your GST refund.
Goods Exported from Australia
If your business outside of Australia pays for goods from an
Australian supplier and these goods are not exported from Australia
within 60 days of payment, then GST will apply to the transaction.
If your business outside of Australia pays to transport goods within
Australia prior to them being exported from Australia, these
transport costs may include GST. These are just two examples of how
a purchase of goods exported from Australia may include a payment of
GST.
In general terms, GST is not intended to apply to goods and
services which are exported from Australia and there are specific
provisions in the GST law designed to make exports GST-free. Despite
this, overseas businesses which purchase Australian goods and
services often find that the price payable includes GST.
For details of Australia’s exports and the relevant provisions
which may make these exports GST-free, click here. The easy way to
tell if you have been charged GST on goods exported from Australia
is to take a look at the contract or purchase invoice, which will
clearly indicate if GST is included in the purchase price. If you
have paid GST, please contact EasyGSTrefunds.
General Background Information
Australia's GST was introduced with effect from 1 July 2000 and
is currently imposed at a rate of 10%.
Through a registration and tax return process, it is usually
possible for businesses outside of Australia to claim a refund of
GST that they have paid. To be entitled to a refund, it is important
to retain evidence of the payment of GST. The required evidence is a
tax invoice. Most
invoices issued by Australian businesses are in the form of a tax
invoice.
Australia’s GST is equivalent to consumption taxes in other parts
of the world. In the European Union, the consumption tax is called
value added tax or VAT. Some other countries, such as New Zealand
and Canada, also refer to their consumption tax as a goods and
services tax.
Australia’s main GST provisions are set out in a piece of
legislation called the A New Tax System (Goods and Services Tax)
Act 1999. This legislation, as amended, includes over 680
sections and consolidated versions run to over 580 pages, not
including the relevant regulations. Administration of the GST is
handled by the Australian Taxation Office. The views of the
Australian Taxation Office are expressed in Public Rulings and there
are more than 70 Public Rulings concerning the operation of the GST.
The ultimate arbiters of the meaning of the GST legislation are the
Australian courts and the volume of relevant case law is
growing.
Australia’s GST in historical perspective
| Ancient Egypt |
Taxes were levied to build
monuments and temples. During one period, scribes collected a
tax on cooking oil.
Australia’s GST
is a broad-based consumption tax, but cooking oil does not
attract GST. |
| Ancient Greece |
In times of war, the Athenians imposed
a tax called the eisphora. When additional resources were
gained through the war effort, the resources were used to
refund the tax.
A refund of tax is
not a new concept. EasyGSTrefunds can help your business gain
a refund of GST. |
| Biblical times |
The Bible notes an expectation that
farmers would provide one tenth of their crops to the king in
order to help feed the poor.
Australia’s GST is currently at
10%. |
| Roman Empire |
During the time of Julius Caesar, a 1%
sales tax was imposed. Under Caesar Augustus, sales tax was 4%
on slaves and 1% on everything else.
Over time, there have been rate increases in
most countries with a GST or other consumption
tax. |
| Medieval England |
The Magna Carta of 1215 provides a
guarantee of no taxation without representation.
Australia’s GST is not intended to impose
taxation on businesses outside of Australia. |
| Reformation in England |
The first modern income tax was
introduced in England in 1719. The United States followed suit
in 1862.
Australia’s GST was
introduced to reduce reliance on personal income tax as a
means of raising revenue. |
| 20th Century |
Sales tax was introduced in Australia
in the 1930s.
Australia’s GST has
replaced sales tax. |
| Modern times |
Australia’s GST was introduced with
effect from 1 July 2000.
Your
business may have been paying Australian GST since 1 July
2000. Refunds of GST are available for four
years. |
| Today |
EasyGSTrefunds helps your business to
claim a refund of GST.
What are you
waiting for? |
Recent GST Developments
1 March 2010: New regime for the registration of
Australian tax professionals.
A new regime for the registration of Australian tax professionals
has come into operation. Where services are provided for a fee in
relation to most aspects Australian GST, those services can only
legally be provided by a registered Tax Agent or registered BAS
agent. EasyGSTrefunds arranges for services to be provided by
registered tax professionals. Details of the new registration regime
are provided at the following link: www.tpb.gov.au
15 June 2009: Calls for an increase in the rate of
GST.
The Business Council of Australia is proposing that the rate at
which GST is imposed be increased. This increase would allow for the
rate of company tax to be halved and also provide scope for
reductions in other taxes. According to the Business Council of
Australia, compared to other nations Australia has a higher
dependence on company tax than on indirect taxes, such as GST. For
more information, click here.
22 April 2009: Public Ruling regarding cancellation
fees.
GST Public Ruling GSTR 2009/3 sets out the Commissioner's views
concerning the GST consequences of cancellation fees. The Ruling
considers payments made when an arrangement for a particular supply
does not proceed or does not proceed in the manner originally
contemplated. The focus of the Ruling is on arrangements that are
cancelled by or on behalf of a recipient or intended recipient. GSTR
2009/3 can be found on the website of the Australian Taxation
Office: www.ato.gov.au
22 April 2008: Prime Minister repeats promise not to
raise rate of GST.
Prime Minister Kevin Rudd has announced a major review of the
Australian tax system. However, he has repeated a promise made
during his election campaign not to raise the rate at which GST is
imposed. For more information, click here.
24 November 2007: Change of Australia’s Federal
Government but no change to the GST.
After coming to power in 1996, John Howard’s Coalition Government
introduced Australia’s GST with effect from 1 July 2000. In the
lead-up to the 2007 Federal election, both the Howard Government and
the Opposition Labor Party pledged not to make changes to the GST if
elected (click here to read about the promises
made). Voting on 24 November 2007 saw Labor’s Kevin Rudd elected as
the 26th Prime Minister of Australia and the second to preside over
Australia’s GST.
1 July 2007: Turnover threshold for compulsory GST
registration increases by 50 percent.
Prior to 1 July 2007, businesses with an annual turnover of more
than $50,000 were required to register for GST. From 1 July 2007
onwards, this compulsory registration threshold has now increased to
$75,000. For non-profit organisations, the threshold has increased
from $100,000 to $150,000. (Click here to read an overview of the
changes.) For businesses located outside of Australia, special rules
apply as to which sales count towards the turnover threshold for
compulsory GST registration. GST registration is necessary in order
to claim a GST refund and businesses below the turnover threshold
may choose to voluntarily register for GST. EasyGSTrefunds can
assist you in this process.
6 November 2006: Singapore’s Prime Minister, Lee Hsien
Loong, has announced that Singapore’s GST, currently set at a rate
of 5%, will rise to 7%; no such change has been foreshadowed for
Australia’s GST.
Australia’s GST is set at a rate of 10%. The legislation
introducing Australia’s GST includes a mechanism designed to prevent
future Commonwealth parliaments from increasing the tax rate except
with the agreement of each of the State and Territory governments.
It is a question of constitutional law as to whether this attempt to
fetter the legislative capacity of the Commonwealth is effective.
There is no indication that the Australian government is currently
contemplating an increase in the rate of Australia’s GST.
19 April 2006: The Australian Taxation Office has
released a determination regarding the GST implications of repair
services provided under a warranty given by a non-resident
manufacturer.
GST Determination GSTD 2006/2 gives the Commissioner’s views as
to the operation of relevant provisions of the A New Tax System
(Goods and Services Tax) Act 1999 and in particular the interaction
between subsection 38-190(1) and subsection 38-190(3). An example of
a situation to which these provisions may apply is where there is a
warranty from a non-resident manufacturer to an Australian customer
and pursuant to that warranty repair services are provided to the
Australian customer. The Commissioner’s view is that such repair
services will probably be subject to GST. The full text of GSTD
2006/2 can be found at the following link: www.ato.gov.au
9 March 2006: EasyGSTrefunds has made a formal submission
to the Australian Taxation Office regarding the procedural
requirements for GST registration of non-resident companies.
In administering the legislation dealing with registration of
entities for GST purposes, the Australian Taxation Office requires
that companies outside of Australia produce certain documentation.
The nature of these requirements could potentially deter otherwise
eligible companies from registering for GST. In a four page
submission timed to coincide with a review of policy and procedures,
EasyGSTrefunds has sought that a more flexible approach be adopted
by the Australian Taxation Office when considering the GST
registration of non-resident companies. EasyGSTrefunds is
well-placed to assist companies from outside of Australia to
negotiate the demands of the GST registration process.
24 May 2005: The Inspector-General of Taxation has
released a report into the administration of GST refunds arising
from the lodgment of Business Activity Statements.
The Inspector-General of Taxation has released a report into the
Australian Taxation Office’s administration of GST refunds arising
from the lodgment of Business Activity Statements. The report notes
that during the 2003-2004 tax year, 4.3% of all Business Activity
Statement refunds were stopped for manual checking. These stopped
refunds amounted to approximately AUD$20 billion and represent about
90% of the total value of Business Activity Statement refunds
claimed. The full text of the Inspector-General’s report, including
his key recommendations, can be found at the following link: www.igt.gov.au
1 April 2005: Services supplied on or after 1 April 2005
to the owners of Australian property who are not residents of
Australia are the subject of two new factsheets published by the
Australian Taxation Office.
The Australian Taxation Office has published two factsheets
regarding services supplied to non-resident property owners on or
after 1 April 2005. The first of these factsheets explains the GST
treatment of real estate services supplied to non-resident owners of
Australian residential properties on or after 1 April 2005. The
second factsheet explains the GST treatment of repair and
maintenance services supplied to non-resident owners of Australian
residential properties on or after 1 April 2005. The full text of
these two factsheets can be found at the following link: www.ato.gov.au
30 March 2005: GST Ruling 2005/2 is released concerning
the GST treatment of supplies of goods and services in the repair,
renovation, modification or treatment of goods from outside
Australia whose destination is outside Australia.
The Australian Taxation Office has released GST Ruling 2005/2
concerning the GST treatment of supplies of goods and services in
the repair, renovation, modification or treatment of goods from
outside Australia whose destination is outside Australia. This
Ruling softens the stance taken by Australian Taxation Office in
relation to which goods and services qualify for GST-free treatment
under section 38-185(1) and section 38-190(1) of the A New Tax
System (Goods and Services Tax) Act 1999. The Ruling concedes that
use of goods in Australia before or after the supply does not
necessarily prevent the repair services, or supplies of goods used
in providing those services, from being GST-free supplies if on
arrival in Australia the goods have a destination outside Australia.
The full text of GST Ruling 2005/2 can be found at the following
link: www.ato.gov.au
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