30 Jun 10 Release of consultation paper on implementation of reforms to GST financial supply provisions
In media release No 2010/147, issued 30 June 2010, the Assistant Treasurer, Senator Nick Sherry, announced the release for public consultation of a paper on reforms to the GST financial supply provisions.
The Government announced the changes in the 2010-11 Budget and they follow Treasury's review of the GST financial supply provisions. The consultation paper provides further information on each of the following changes:
- increasing the financial acquisitions threshold (FAT) input tax credit test from $50,000 to $150,000;
- simplifying the treatment of hire purchase agreements by removing the need to apply different GST treatments to different parts of the one supply;
- aligning the attribution rules for hire purchase arrangements for both cash and non-cash GST taxpayers;
- excluding bank deposit accounts from the current special rules for borrowings;
- expanding the range of expenses qualifying for a reduced input tax credit (RITC);
- preventing the provisions allowing a RITC for trustee and responsible entity services from being used to allow RITCs for all acquisitions; and
- clarifying the language and relationship between the concepts of guarantees and indemnities.
"The changes will apply from 1 July 2012 and I urge interested parties to provide feedback on the design of these financial supply measures," the Assistant Treasurer said.
Consultation closes on 30 August 2010.