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Indirect Tax Legislation Amendment Bill 2000
Schedule 4 Agents

   

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

1  Section 9-39 (before table item 1)

Insert:

1A

Agents and insurance brokers

Division 153

2  Section 9-99 (before table item 1)

Insert:

1A

Agents and insurance brokers

Division 153

3  Section 11-99 (before table item 1)

Insert:

1A

Agents and insurance brokers

Division 153

4  At the end of section 153-1

Add “It also allows in some cases a supply or acquisition made through an agent to be treated as 2 separate supplies or acquisitions.”.

5  After section 153-1

Insert:

Subdivision 153-A General

6  At the end of subsection 153-15(2)

Add:

Note:          If Subdivision 153-B is to apply to the supply, only your agent can issue the tax invoice: see subsection 153-55(3).

7  Subsections 153-25(1) and (2)

Omit “this Division”, substitute “this Subdivision”.

8  After section 153-25

Insert:

Subdivision 153-B Principals and agents as separate suppliers or acquirers

153-50   Arrangements under which agents are treated as suppliers or acquirers

                   An entity (the principal ) may, in writing, enter into an arrangement with another entity (the agent ) under which:

                     (a)  the agent will, on the principal’s behalf:

                              (i)  make supplies to third parties; or

                             (ii)  make acquisitions from third parties; or

                            (iii)  make both supplies to third parties and acquisitions from third parties; and

                     (b)  the kinds of supplies or acquisitions, or the kinds of supplies and acquisitions, to which the arrangement applies are specified; and

                     (c)  for the purposes of the GST law:

                              (i)  the agent will be treated as making the supplies to the third parties, or acquisitions from the third parties, or both; and

                             (ii)  the principal will be treated as making corresponding supplies to the agent, or corresponding acquisitions from the agent, or both; and

                     (d)  in the case of supplies to third parties:

                              (i)  the agent will issue to the third parties, in the agent’s own name, all the * tax invoices and * adjustment notes relating to those supplies; and

                             (ii)  the principal will not issue to the third parties any tax invoices and adjustment notes relating to those supplies; and

                     (e)  the arrangement ceases to have effect if the principal or the agent, or both of them, cease to be * registered.

153-55   The effect of these arrangements on supplies

             (1)  A * taxable supply that the principal makes to a third party through the agent is taken to be a supply that is a taxable supply made by the agent to the third party, and not by the principal, if:

                     (a)  the supply is of a kind to which the arrangement applies; and

                     (b)  the supply is made in accordance with the arrangement; and

                     (c)  both the principal and the agent are * registered.

             (2)  In addition, the principal is taken to make a supply that is a * taxable supply to the agent. This supply is taken:

                     (a)  to be a supply of the same thing as is supplied in the taxable supply (the agent’s supply ) that the agent is taken to make; and

                     (b)  to have a * value equal to 10 / 11 of the amount that is payable to the principal by the agent in respect of the agent’s supply.

The agent is taken to make a corresponding * creditable acquisition from the principal.

             (3)  If the principal pays, or is liable to pay, an amount, as a commission or similar payment, to the agent for the agent’s supply to the third party:

                     (a)  for the purpose of paragraph (2)(b), the amount payable by the agent to the principal is taken to be reduced by the amount the principal pays, or is liable to pay, to the agent; and

                     (b)  the supply by the agent to the principal, to which the principal’s payment or liability relates, is not a * taxable supply.

             (4)  However, this section no longer applies, and is taken never to have applied, if the principal issues to the third party, in the principal’s own name, any * tax invoice or * adjustment note relating to the supply.

             (5)  This section has effect despite section 9-5 (which is about what are taxable supplies), section 9-75 (which is about the value of taxable supplies) and section 11-5 (which is about what are creditable acquisitions).

153-60   The effect of these arrangements on acquisitions

             (1)  An acquisition that the principal makes from a third party through the agent is taken to be a * creditable acquisition made by the agent from the third party, and not by the principal, if:

                     (a)  the acquisition is of a kind to which the arrangement applies; and

                     (b)  the acquisition is made in accordance with the arrangement; and

                     (c)  both the principal and the agent are * registered.

             (2)  In addition, the agent is taken to make a supply that is a * taxable supply to the principal. This supply is taken:

                     (a)  to be a supply of the same thing as is acquired in the * creditable acquisition (the agent’s acquisition ) that the agent is taken to make; and

                     (b)  to have a * value equal to 10 / 11 of the amount that is payable to the agent by the principal in respect of the agent’s acquisition.

The principal is taken to make a corresponding acquisition from the agent, and the acquisition is taken to be a creditable acquisition if, apart from this section, the principal’s acquisition from the third party would have been a creditable acquisition.

             (3)  If the principal pays, or is liable to pay, an amount, as a commission or similar payment, to the agent for the agent’s acquisition from the third party:

                     (a)  for the purpose of paragraph (2)(b), the amount payable by the principal to the agent is taken to be increased by the amount the principal pays, or is liable to pay, to the agent; and

                     (b)  the supply by the agent to the principal, to which the principal’s payment or liability relates, is not a * taxable supply.

             (4)  This section has effect despite section 11-5 (which is about what are creditable acquisitions), section 11-10 (which is about what are acquisitions), section 9-5 (which is about what are taxable supplies) and section 9-75 (which is about the value of taxable supplies).

153-65   Determinations that supplies or acquisitions are taken to be under these arrangements

             (1)  The Commissioner may determine in writing that supplies or acquisitions of a specified kind that any entity (the agent ) makes on behalf of any other entity (the principal ) to or from third parties are taken to be supplies or acquisitions:

                     (a)  that are of a kind to which an arrangement of a kind referred to in section 153-50 applies; and

                     (b)  that are made in accordance with that arrangement.

             (2)  The determination has effect accordingly, unless either the agent or the principal notifies the other in writing, or both notify each other in writing, that:

                     (a)  any supplies that the agent makes to third parties on the principal’s behalf are not supplies to which such an arrangement applies; and

                     (b)  any acquisitions that the agent makes from third parties on the principal’s behalf are not acquisitions to which such an arrangement applies.

9  Before section 188-25

Insert:

188-24   Supplies to which Subdivision 153-B applies

             (1)  In working out your * current annual turnover or your * projected annual turnover, you may choose to treat the * value of any * taxable supply that, under subsection 153-55(1), you are taken to make as an agent as being an amount equal to the difference between:

                     (a)  what is, apart from this section, the value of the supply; and

                     (b)  the value of the taxable supply that, under subsection 153-55(2), is taken to be made to you in relation to the taxable supply that you are taken to make.

             (2)  In working out your * current annual turnover or your * projected annual turnover, you may choose to treat the * value of any * taxable supply that, under subsection 153-60(2), you are taken to make as an agent as being an amount equal to the difference between:

                     (a)  what is, apart from this section, the value of the supply; and

                     (b)  10 / 11 of the * consideration you provided or are liable to provide for the * creditable acquisition that, under subsection 153-60(1), you are taken to make and that relates to that supply.

Taxation Administration Act 1953

10  After subsection 70(1)

Insert:

       (1AA)  Subsection (1) requires a record of an arrangement entered into under section 153-50 of the GST Act to be kept and retained by the party entering into the arrangement as principal. It does not require such a record to be kept or retained by the party entering into the arrangement as agent.

       (1AB)  Subsection (1) requires records of a notice given under subsection 153-65(2) of the GST Act to be kept and retained by both the entity giving the notice and the entity receiving it.