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22 May 14 Waiver of tax invoice requirement: motor vehicle incentive payments

The ATO has made a legislative determination which waives the requirement for a recipient making a creditable acquisition to hold a tax invoice for an input tax credit to be attributable to a tax period: A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Motor Vehicle Incentive Payment Made to Motor Vehicle Dealer) Legislative Instrument 2014 (F2014L00582, registered 21 May 2014).

The instrument applies where:

(a) the recipient makes a creditable acquisition of a motor vehicle from a motor vehicle dealer (the supplier), and

(b) the supplier receives or is entitled to receive a motor vehicle incentive payment for the supply of the motor vehicle to the recipient in addition to the consideration it receives from the recipient, and

(c) the recipient holds a document that meets the requirements prescribed in the instrument.

The instrument provides for an input tax credit for a creditable acquisition to be attributable to a tax period for acquisitions of a motor vehicle where the total price of the supply and the amount of GST payable on the supply is not stated on the document held by the recipient. This circumstance arises where a motor vehicle incentive payment is made to the supplier by a motor vehicle manufacturer, distributor or importer and is part of the consideration for the supply to the recipient (third party consideration). The instrument also sets out the particular information that must be included in the document held by the recipient for the input tax credit to be attributable to that tax period.

These requirements set out in the instrument are not substantively different to the documents motor vehicle dealers have been providing as tax invoices to customers before the decision of the Full Court of the Federal Court in AP Group Limited v FCT [2013] FCAFC 105.

This instrument commenced on 1 May 2014 and applies to tax periods for which the GST return is required to be given to the Commissioner on or after 1 May 2014. It applies retrospectively to align to the date from which the Commissioner agreed for motor vehicle dealers to have modified documentation to implement the decision in the AP Group Limited case. The Commissioner recognised that entities were required to modify their documentation to implement the court’s decision and allowed until 1 May 2014 for this to be done.

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