We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Hard as it may be to believe, Goods and Services Tax (GST) has
now been a feature of life for businesses and consumers in Jersey
for over four years. Over this period, of course, the rate has
increased from the initial 3% to the current 5%. Few would be
prepared to bet on the rate staying at 5% indefinitely.
16 August 2012 is a red letter day as far as the impact of GST
on commercial leases is concerned. Under the so-called
'grandfathering' provisions in the GST legislation, the
'supply' made by landlords under commercial leases which
were entered into before 17 August 2007 (when the GST Law came into
force) was stated to be zero-rated until the earlier of:
the date when the lease was varied; and
16 August 2012
In other words, the grandfathering provisions were to last for a
maximum of five years.
Landlords under affected leases, assuming they qualify for
registration by virtue of having an annual turnover exceeding
Ł300,000, will therefore with effect from 16 August 2012 be
required to charge 5% GST to their tenants and account to the Taxes
Office for this GST less any 'input' GST paid by the
landlord.
The issue for landlords will be whether the amount of rental
payable by their tenants is properly to be regarded as inclusive or
exclusive of GST. Leases entered into since the advent of the GST
legislation will typically contain express GST provisions. However,
many leases which have up until now benefited from the
grandfathering provisions, especially those entered into before GST
was even conceived of, will not contain any such provisions.
It will therefore be a question of construing each such lease to
see whether or not, on a proper construction, the rental can be
said to be exclusive of GST. This may well be the case in leases
which have widely-drawn 'outgoings' provisions. But it is
impossible to generalise and the wording of each relevant lease
will need to be specifically considered.
Clearly there will be some cases where landlords will need to
seek to agree lease variations with their tenants in order to
establish a proper basis for the recovery of GST. Even in cases
where the existing wording, in the absence of express GST
provisions, is considered satisfactory, landlords may well wish, if
the opportunity presents itself, to vary their leases to include
express GST provisions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In the present case, the issue concerned whether tax advice provided by the taxpayer's accountants was disclosable to an inspector of taxes for the purpose of investigating Prudential Group's tax liability.
Jointly Owned Property (JOP) is the term used to describe a building or land, which has been divided into units and where part of the land is designated as common areas (Article 2 of Law No. 27
of 2007).
The Financial Secretary of Hong Kong, Mr. John Tsang, announced today (22 February 2013) that further stamp duty measures will be implemented, all effective starting in the mid-night on 23 February 2013.
The growth in population which Qatar has witnessed in the last few years has led the Qatari Government to apply a "rent control" strategy to prevent economic instability caused by high or frequent rent increases that may be imposed by landlords.
The clauses of off plan real estate sales contracts in the UAE customarily contain "Force Majeure" clauses, however, they do not necessarily conform to the traditional concept of force majeure.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
