Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 30) 2015
Explanatory Statement
General Outline of instrument
- This instrument sets out the circumstances where a tax invoice is not required for a particular entity to claim input tax credits under Division 29 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
2. This determination replaces the A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No.3) 2001 – Direct Entry Services (the previous instrument).
3. The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect
4. The instrument commences on the day after registration.
5. The instrument does not apply retrospectively.
What is this instrument about?
6. Under Division 29 of the GST Act, a tax invoice is required in order to claim input tax credits for any creditable acquisitions that an entity makes (unless the value of the taxable supply is $50 or less).
7. This determination will waive the tax invoice requirement for entities who make creditable acquisitions of Direct Entry Services.
8. For the purposes of the determination, Direct Entry Services means the processing of an entity's direct credit and direct debit files by an Australian ADI.
What is the effect of this instrument?
9. The effect of this instrument is that an entity will not be required to hold a tax invoice for a creditable acquisition of Direct Entry Services in order to attribute an input tax credit on the acquisition to a tax period, provided that at the time the entity gives its Business Activity Statement ("BAS") for the tax period to the Commissioner, the requirements set out in the legislative instrument are satisfied.
10. Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
Background
11. This instrument replaces A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No.3) 2001 – Direct Entry Services. The replaced instrument is repealed on the commencement of this determination.
Consultation
12. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law.
13. Because there is no substantive change from the previous instrument therefore the instrument is considered minor or machinery in nature.
14. As such, no further consultation has been undertaken in the development of this instrument.
James O’Halloran
Deputy Commissioner of Taxation
15 September 2015
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 30) 2015
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
This Legislative Instrument will waive the tax invoice requirement for entities who make creditable acquisitions of Direct Entry Services.
Human rights implications
This instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of current invoicing and payment practices.
Conclusion
This instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 30) 2015 was enacted to address the need for a streamlined process for entities to claim input tax credits without the necessity of holding a tax invoice for certain creditable acquisitions. This instrument, introduced by the Commonwealth of Australia, is designed to simplify compliance for entities that engage in Direct Entry Services, specifically the processing of direct credit and direct debit files by Australian authorised deposit-taking institutions (ADIs). The objective of this legislative instrument is to ensure that entities can attribute input tax credits to their tax periods without the burden of maintaining tax invoices, provided they comply with the requirements specified in the instrument. This minor legislative instrument, which does not substantially alter existing law, is intended to reduce compliance costs and improve efficiency in tax reporting.
Scope and Application
The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 30) 2015 applies to entities that make creditable acquisitions of Direct Entry Services, which are defined as the processing of an entity's direct credit and direct debit files by an Australian Authorised Deposit-taking Institution (ADI). This instrument is a legislative instrument under the Legislative Instruments Act 2003 and operates within the Commonwealth jurisdiction of Australia. The instrument replaces the previous A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No.3) 2001 – Direct Entry Services and does not apply retrospectively. It is considered a minor or machinery instrument and therefore did not require further consultation beyond the legislative process. The effect of this instrument is that entities will not be required to hold a tax invoice for creditable acquisitions of Direct Entry Services to attribute an input tax credit on the acquisition to a tax period, provided that they satisfy the requirements set out in the instrument when they submit their Business Activity Statement to the Commissioner. There are no stated exclusions or thresholds in the instrument, and its application may be extended or restricted through subordinate instruments.
Key Provisions
The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 30) 2015 provides a framework under which certain entities are exempted from the usual requirement to hold a tax invoice in order to claim input tax credits for creditable acquisitions. Specifically, Section 7 of the Determination states that this waiver applies to Direct Entry Services, defined in Section 8 as the processing of an entity's direct credit and direct debit files by an Australian Authorised Deposit-taking Institution (ADI). This means that entities involved in such transactions are not required to hold a tax invoice to attribute an input tax credit to a tax period. However, compliance with the conditions of the Determination is required when lodging the Business Activity Statement (BAS) with the Commissioner, as outlined in Section 9.
The Determination imposes specific obligations on the entities that fall under its purview. These entities must ensure that they meet all the requirements of the Determination at the time they lodge their BAS for the relevant tax period. This means that they must provide the necessary information and documentation to substantiate their claim for input tax credits related to Direct Entry Services. This requirement is crucial to maintain compliance with the GST Act and avoid any potential penalties or consequences for non-compliance.
Breaching the conditions set out in the Determination can result in various civil and criminal consequences. While the Determination itself does not specify particular offences or penalties, it operates within the broader framework of the GST Act, which includes provisions for both civil and criminal penalties. Civil penalties can include fines and interest on unpaid taxes, while criminal penalties might include imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the courts based on the specific circumstances of the case and the relevant provisions of the GST Act.