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Indirect Tax Legislation Amendment Bill 2000
Schedule 3 Supplies involving non-residents

   

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

1  Section 9-69 (after table item 4)

Insert:

4A

Non-residents making supplies connected with Australia

Division 83

2  Section 9-99 (after table item 4)

Insert:

4AA

Non-residents making supplies connected with Australia

Division 83

3  Section 25-49 (after table item 2)

Insert:

3

Non-residents making supplies connected with Australia

Division 83

4  Section 29-99 (after table item 3)

Insert:

4

Non-residents making supplies connected with Australia

Division 83

5  Section 37-1 (after table item 20A)

Insert:

20B

Non-residents making supplies connected with Australia

Division 83

6  After section 38-187

Insert:

38-188   Tooling used by non-residents to manufacture goods for export

                   A supply of goods is GST-free if:

                     (a)  the * recipient of the supply is a * non-resident, and is not * registered or * required to be registered; and

                     (b)  the goods are jigs, patterns, templates, dies, punches and similar machine tools to be used in Australia solely to manufacture goods that will be for export from Australia.

7  Subsection 38-190(1) (table item 1, 3rd column)

Omit “directly connected with goods or”, substitute “a supply of work physically performed on goods situated outside Australia or a supply directly connected with”.

8  Subsection 38-190(1) (table item 2)

Repeal the item, substitute:

2

Supply to * non-resident outside Australia.

a supply that is made to a * non-resident who is not in Australia when the thing supplied is done, and:

(a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with * real property situated in Australia; or

(b) the * non-resident acquires the thing in * carrying on the non-resident’s * enterprise, but is not * registered or * required to be registered.

9  Subsection 38-190(1) (table item 3, 3rd column)

Omit “directly connected with goods situated in Australia when the thing supplied is done, or”, substitute “of work physically performed on goods situated in Australia when the thing supplied is done, or a supply directly connected”.

10  At the end of subsection 38-190(2)

Add “and would not be * GST-free”.

11  At the end of section 38-190

Add:

             (4)  A supply is not taken, for the purposes of item 3 in that table, to be a supply made to a * recipient who is not in Australia if:

                     (a)  it is a supply under an agreement entered into, whether directly or indirectly, with an * Australian resident; and

                     (b)  the supply is provided, or the agreement requires it to be provided, to another entity outside Australia.

12  After section 81-10

Insert:

Division 83 Non-residents making supplies connected with Australia

   

83-1   What this Division is about

The GST on taxable supplies made by non-residents can, with the agreement of the recipients, be “reverse charged” to the recipients.

83-5   “Reverse charge” on supplies made by non-residents

             (1)  The GST on a * taxable supply is payable by the * recipient of the supply, and is not payable by the supplier, if:

                     (a)  the supplier is a * non-resident; and

                     (b)  the supplier does not make the supply through an * enterprise that the supplier * carries on in Australia; and

                     (c)  the recipient is * registered or * required to be registered; and

                     (d)  the supplier and the recipient agree that the GST on the supply be payable by the recipient.

             (2)  However, this section does not apply to:

                     (a)  a supply that is not * connected with Australia but that is a * taxable supply because of Division 84 (which is about offshore supplies other than goods or real property); or

                     (b)  a taxable supply made by a * non-resident through a * resident agent.

Note:       GST on these taxable supplies is payable by the resident agent: see section 57-5.

             (3)  This section has effect despite section 9-40 (which is about liability for the GST).

83-10   Recipients who are members of GST groups

             (1)  If section 83-5 applies to a * taxable supply but the * recipient of the supply is a * member of a * GST group, the GST on the supply:

                     (a)  is payable by the * representative member; and

                     (b)  is not payable by the member (unless the member is the representative member).

             (2)  This section has effect despite section 83-5.

83-15   Recipients who are participants in GST joint ventures

             (1)  If section 83-5 applies to a * taxable supply but the * recipient of the supply is a * participant in a * GST joint venture and the supply is made, on the recipient’s behalf, by the * joint venture operator of the GST joint venture in the course of activities for which the joint venture was entered into, the GST on the supply:

                     (a)  is payable by the joint venture operator; and

                     (b)  is not payable by the participant.

             (2)  This section has effect despite section 83-5.

83-20   The amount of GST on “reverse charged” supplies made by non-residents

             (1)  The amount of GST on a supply to which section 83-5, 83-10 or 83-15 applies is 10% of the * price of the supply.

             (2)  This section has effect despite section 9-70 (which is about the amount of GST on taxable supplies).

83-25   When non-residents must apply for registration

             (1)  A * non-resident need not apply to be * registered under this Act if the non-resident’s * annual turnover would not meet the * registration turnover threshold but for the * taxable supplies of the non-resident that are taxable supplies to which section 83-5 applies.

             (2)  It does not matter whether the * non-resident is * required to be registered.

             (3)  This section has effect despite section 25-1 (which is about when entities must apply for registration).

83-30   When the Commissioner must register non-residents

             (1)  The Commissioner need not * register a * non-resident if the Commissioner is satisfied that the non-resident’s * annual turnover would not meet the * registration turnover threshold but for the * taxable supplies of the non-resident that are taxable supplies to which section 83-5 applies.

             (2)  It does not matter whether the * non-resident is * required to be registered.

             (3)  This section has effect despite section 25-5 (which is about when the Commissioner must register an entity).

83-35   Tax invoices not required for “reverse charged” supplies made by non-residents

             (1)  A * non-resident is not required to issue a * tax invoice for a * taxable supply of the non-resident that is a taxable supply to which section 83-5 applies.

             (2)  Subsection (1) has effect despite section 29-70 (which is about the requirement to issue tax invoices).

             (3)  Subsection 29-10(3) does not apply in relation to a * creditable acquisition made by an entity as a result of being the * recipient of a * taxable supply to which section 83-5 applies.

13  After section 188-22

Insert:

188-23   Supplies “reverse charged” under Division 83 not to be included in a recipient’s turnover

                   To avoid doubt, if the GST on a * taxable supply is, under Division 83, payable by the * recipient of the supply, that supply is disregarded in working out the * current annual turnover or the * projected annual turnover of the recipient.