A New Tax System (Goods and Services Tax) Act 1999 Waiver of Requirement to hold a Tax Invoice Determination 2000 - Members of MasterCard International and Visa International

Overview

The A New Tax System (Goods and Services Tax) Act 1999 was enacted by the Commonwealth of Australia's Parliament to introduce a nationwide goods and services tax (GST) system, replacing the previous fragmented system of state-based wholesale taxes. This legislation aimed to create a more streamlined and equitable tax regime across the country, addressing the inefficiencies and distortions caused by the previous system. The Act was designed to harmonise the tax system and enhance its overall effectiveness, contributing to a fairer and more efficient taxation framework. This legislative instrument, specifically the "A New Tax System (Goods and Services Tax) Act 1999 Waiver of Requirement to Hold a Tax Invoice Determination 2000 - Members of Mastercard International and Visa International," was made under the authority of the Act and the Acts Interpretation Act 1901. It was issued by Tracey Mellick, the Assistant Commissioner of Taxation, Goods and Services Tax Law & Interpretation, and a delegate of the Commissioner. The determination aims to simplify the tax compliance requirements for members of Mastercard International and Visa International by allowing them to rely on interchange service reports instead of traditional tax invoices for attributing input tax credits to tax periods, provided the reports contain the necessary details and are held at the time of lodging their GST return or Business Activity Statement.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Waiver of Requirement to Hold a Tax Invoice Determination 2000 applies specifically to members of Mastercard International and Visa International who are recipients of credit and debit card services from other financial institutions, commonly referred to as 'bank interchange services'. This determination modifies the usual requirement for these members to hold a tax invoice in order to claim an input tax credit on their acquisitions. Instead, they are allowed to attribute input tax credits based on reports produced by Mastercard International and Visa International, provided these reports are held at the time of lodging their GST return or Business Activity Statement (BAS) with the Commissioner. The reports must include details such as the recipient's name and address or Australian Business Number, a description of each supply, the quantity or extent of the supply, the date of the supply, the GST-inclusive amount of the supply, and the date of the report. This determination has been in effect since 1 July 2000, and its applicability may be withdrawn by a subsequent determination, public ruling, or legislative change.

Key Provisions

The main operative sections of the A New Tax System (Goods and Services Tax) Act 1999 Waiver of Requirement to hold a Tax Invoice Determination 2000 - MEMBERS of MASTERCARD INTERNATIONAL and VISA INTERNATIONAL provide a waiver of the requirement for members of Mastercard International and Visa International to hold a tax invoice for certain acquisitions in order to attribute an input tax credit to a tax period. This waiver applies to members of Mastercard International and Visa International who are recipients of credit and debit card services, known as "bank interchange services", from other financial institutions (section 2). Instead of a tax invoice, these members are required to hold a report produced by Mastercard International or Visa International that contains specified information about the acquisitions (section 3). This waiver is in effect from 1 July 2000 until it is withdrawn or superseded by a subsequent determination or public ruling, or by a change in legislation (section 1). The obligations imposed on the parties governed by this determination include the requirement for members of Mastercard International and Visa International to hold a report produced by these organisations that contains specified information about the acquisitions (section 3). The report must include the recipient's name, address or Australian Business Number, a brief description of each supply, the quantity or extent of each supply (where applicable), the date of each supply, the GST-inclusive amount of each supply, the date of the report, and a statement to the effect that the report can be used in lieu of a tax invoice (section 4). Members must provide this report to the Commissioner of Taxation at the same time as they lodge their GST return or Business Activity Statement for the tax period (section 2). Failure to comply with these obligations may result in civil or criminal consequences. Under the A New Tax System (Goods and Services Tax) Act 1999, breaches of the requirements of this determination may result in civil or criminal penalties. Civil penalties for failure to comply with the Act or this determination may include fines of up to $21,000 for individuals and up to $105,000 for corporations, as well as interest and other costs. Criminal penalties may include imprisonment for up to two years for individuals and fines of up to $210,000 for corporations, as well as other penalties such as disqualification from managing a corporation. These penalties are in addition to any other civil or criminal consequences that may apply under other laws.