The Government has released draft legislation which proposes to
overhaul the goods and services tax ("GST") treatment of
government taxes, fees and charges. Currently the Treasurer
produces a biannual determination (a ruling which is binding on the
Commissioner) which serves as an exhaustive list of GST exempt
taxes, fees and charges. Broadly, the draft legislation proposes to
move to a principles based exemption which allows government
entities to self-assess the GST treatment of their fees and
charges. It is proposed that the changes will take effect from 1
At present, Division 81 of the style="font-style:
italic;">A New Tax System (Goods and Services Tax) Act 1999
(the "GST Act") regulates the GST treatment of government
taxes, fees and charges. It provides that such charges may be
consideration for a supply, and hence be subject to GST. However
section 81-5(2) allows the Treasurer to produce a determination
listing charges which are exempt from GST. In effect this has meant
that government entities must consult the Treasurer's
determination to see which of their fees and charges are exempt
The proposed legislation would replace the current Division 81
with a new, principles based test. Under this test Australian taxes
will prima facie not be consideration, and hence will not be
subject to GST. Likewise, an "Australian fee or charge"
will not be consideration if it relates to:
an application, provision or retention of a government licence
(or similar permission or exemption); or
the provision of information or documents with a government
agency, or the lodgement of documents or information with the
An "Australian fee or charge" will be a fee which is
payable under an Australian law to a government agency.
For example, an application fee for a drivers licence will
continue to be exempt from GST. A fee paid when lodging a freedom
of information request will also be exempt.
However the Treasurer will have the ability to make regulations
stating that a tax, fee or charge is subject to GST.
If the amendments are introduced it is likely that most charges
currently listed in the Treasurer's determination will
continue to be exempt from GST. However these should be reviewed on
a case by case basis in light of the new provisions.
These amendments should provide relief from the current
compliance burden associated with ensuring that taxes, fees and
charges are added to the Treasurer's list of charges that
are exempt from GST. However, it may result in greater
uncertainty when determining the GST treatment of taxes, fees and
charges as there will not be a definitive list provided. The draft
legislation is open for public comment until 11 February 2011.
Moore Stephens would be happy to assist interested parties prepare
submissions or review your current taxes, fees and charges to
determine if it will result in changes being required to be made to
your GST systems. Please contact your Moore Stephens relationship
partner for more information.
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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