Commonwealth Consolidated Acts

INDIRECT TAX LEGISLATION AMENDMENT ACT 2000 - SCHEDULE 5

A New Tax System (Goods and Services Tax) Act 1999

1   Paragraph 11 - 15(4)(b)

Repeal the paragraph, substitute:

  (b)   you do not * exceed the financial acquisitions threshold.

2   At the end of section   11 - 15

Add:

  (5)   An acquisition is not treated, for the purposes of paragraph   (2)(a), as relating to making supplies that would be * input taxed to the extent that:

  (a)   the acquisition relates to making a * financial supply consisting of a borrowing; and

  (b)   the borrowing relates to you making supplies that are not input taxed.

2A   Section   11 - 99 (after table item   3)

Insert:

3   Paragraph 15 - 10(4)(b)

Repeal the paragraph, substitute:

  (b)   you do not * exceed the financial acquisitions threshold.

4   At the end of section   15 - 10

Add:

  (5)   An importation is not treated, for the purposes of paragraph   (2)(a), as relating to making supplies that would be * input taxed to the extent that:

  (a)   the importation relates to making a * financial supply consisting of a borrowing; and

  (b)   the borrowing relates to you making supplies that are not input taxed.

4A   Section   15 - 99 (before table item   1)

Insert:

4B   Section   37 - 1 (before table item   11)

Insert:

5   After subsection 70 - 5(1)

Insert:

  (1A)   However, an acquisition is not a reduced credit acquisition if, without this Division applying, an entity is entitled to an input tax credit for the acquisition.

Note:   Acquisitions relating to financial supplies can give rise to input tax credits: see subsections 11 - 15(4) and (5).

5A   After Division   70

Insert:

Division   71 -- Financial supplies (acquisitions and importations to provide fringe benefits)

71 - 1   What this Division is about

Financial suppliers may not be entitled to input tax credits for acquisitions or importations they make to provide fringe benefits to their employees.

Note:   Under the Fringe Benefits Tax Assessment Act 1986 , a lower rate of fringe benefits tax is payable for providing fringe benefits without entitlement to input tax credits.

71 - 5   Acquisitions by financial suppliers to provide fringe benefits

  (1)   An acquisition that solely or partly relates to making * financial supplies is not a * creditable acquisition to the extent that the acquisition would (but for this section) be a * GST - creditable benefit on the provision of which * fringe benefits tax is payable.

  (2)   However, this section applies only if you * exceed the financial acquisitions threshold.

  (3)   This section has effect despite section   11 - 5 (which is about what is a creditable acquisition).

71 - 10   Importations by financial suppliers to provide fringe benefits

  (1)   An importation that solely or partly relates to making * financial supplies is not a * creditable importation to the extent that the importation would (but for this section) be a * GST - creditable benefit on the provision of which * fringe benefits tax is payable.

  (2)   However, this section applies only if you * exceed the financial acquisitions threshold.

  (3)   This section has effect despite section   15 - 5 (which is about what is a creditable importation).

6   Subsection 129 - 5(2)

Omit all the words after "unless", substitute "you * exceed the financial acquisitions threshold".

7   After section   188 - 35

Insert:

Division   189 -- Exceeding the financial acquisitions threshold

189 - 1   What this Division is about

You can be entitled to input tax credits for your acquisitions relating to financial supplies (even though financial supplies are input taxed) if you do not exceed the financial acquisitions threshold.

189 - 5   Exceeding the financial acquisitions threshold--current acquisitions

General

  (1)   You exceed the financial acquisitions threshold at a time during a particular month if, assuming that all the * financial acquisitions you have made, or are likely to make, during the 12 months ending at the end of that month were made solely for a * creditable purpose, either or both of the following would apply:

  (a)   the amount of all the input tax credits to which you would be entitled for those acquisitions would exceed $50,000 or such other amount specified in the regulations;

  (b)   the amount of the input tax credits referred to in paragraph   (a) would be more than 10% of the total amount of the input tax credits to which you would be entitled for all your acquisitions and importations during that 12 months (including the financial acquisitions).

Members of GST groups

  (2)   If you are a * member of a * GST group, you exceed the financial acquisitions threshold at a time during a particular month if, assuming that all the * financial acquisitions you or any other member of the group have made, or are likely to make, during the 12 months ending at the end of that month were made solely for a * creditable purpose, either or both of the following would apply:

  (a)   the amount of all the input tax credits to which you or any other member of the group would be entitled for those acquisitions would exceed $50,000 or such other amount specified in the regulations;

  (b)   the amount of the input tax credits referred to in paragraph   (a) would be more than 10% of the total amount of the input tax credits to which you or any other member of the group would be entitled for all acquisitions and importations of any member of the group during that 12 months (including the financial acquisitions).

189 - 10   Exceeding the financial acquisitions threshold--future acquisitions

General

  (1)   You exceed the financial acquisitions threshold at a time during a particular month if, assuming that all the * financial acquisitions you have made, or are likely to make, during that month and the next 11 months were made solely for a * creditable purpose, either or both of the following would apply:

  (a)   the amount of all the input tax credits to which you would be entitled for those acquisitions would exceed $50,000 or such other amount specified in the regulations;

  (b)   the amount of the input tax credits referred to in paragraph   (a) would be more than 10% of the total amount of the input tax credits to which you would be entitled for all your acquisitions and importations during those months (including the financial acquisitions).

Members of GST groups

  (2)   If you are a * member of a * GST group, you exceed the financial acquisitions threshold at a time during a particular month if, assuming that all the * financial acquisitions you or any other member of the group have made, or are likely to make, during that month and the next 11 months were made solely for a * creditable purpose, either or both of the following would apply:

  (a)   the amount of all the input tax credits to which you or any other member of the group would be entitled for those acquisitions would exceed $50,000 or such other amount specified in the regulations;

  (b)   the amount of the input tax credits referred to in paragraph   (a) would be more than 10% of the total amount of the input tax credits to which you or any other member of the group would be entitled for all acquisitions and importations of any member of the group during those months (including the financial acquisitions).

189 - 15   Meaning of financial acquisition

    A financial acquisition is an acquisition that relates to the making of a * financial supply (other than a financial supply consisting of a borrowing).

8   Section   195 - 1 (definition of annual turnover of financial supplies )

Repeal the definition.

9   Section   195 - 1

Insert:

"exceed the financial acquisitions threshold" has the meaning given by Division   189.

10   Section   195 - 1

Insert:

"financial acquisition" has the meaning given by section   189 - 15.

10A   Section   195 - 1

Insert:

"fringe benefits tax" means tax imposed by the Fringe Benefits Tax Act 1986 .

10B   Section   195 - 1

Insert:

"GST-creditable benefit" has the meaning given by section   149A of the Fringe Benefits Tax Assessment Act 1986 .

11   Section   195 - 1 (definition of reduced credit acquisition )

Omit "subsection 70 - 5(1)", substitute "section   70 - 5".