The Government will reduce compliance costs for businesses through a package of GST reform measures to help business owners spend less time wading through red tape.
"These measures will reduce the number of non-residents that need to be involved in the GST system and, protect the GST base," said the Assistant Treasurer, Senator Nick Sherry.
The key components of the plan are:
- restructuring the margin scheme provisions with effect from 1 July 2012. These are currently a way of working out the GST payable when property is sold as part of a business. This will clarify and simplify the rules and ensure greater certainty for taxpayers on issues surrounding the use of valuations;
- significantly increasing the threshold above which businesses need to interact with the financial supply provisions from $50,000 to $150,000 of input tax credits with effect from 1 July 2012;
- introducing measures to protect the GST base by reducing opportunities for businesses to inappropriately take advantage of the reduced input tax credit concessions by bundling services; and
- allowing small businesses accounting for GST on a cash basis to claim input tax credits upfront in relation to hire purchase arrangements. This change will significantly assist those businesses that have been forced into higher cost chattel mortgages following the introduction of the GST.
The reforms are the result of three reviews into specific aspects of the GST announced in the 2009-10 Budget following recommendations by the Board of Taxation's Review of the Legal Framework for the Administration of the GST.
For more information, see the Assistant Treasurer's media release, No 2010/95, 11 May 2010.