EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 108
Issued by authority of the Assistant Treasurer and
Minister for Financial Services and Superannuation
A New Tax System (Goods and Services Tax) Act 1999
A New Tax System (Goods and Services Tax) Amendment Regulations 2011 (No. 1)
Section 177-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the amending Regulations is to amend the A New Tax System (Goods and Services Tax) Regulations 1999 (the Principal Regulations) to update references to the Corporations Law by replacing them with references to equivalent provisions in the Corporations Act 2001 (the Corporations Act).
In 2001, the Corporations Act was passed, repealing the Corporations Law. A number of consequential amendments were made to legislation, including the GST Act where references to the Corporations Law were amended to refer to the Corporations Act.
However, the Principal Regulations were not amended and still contain references to the Corporations Law. These include the definitions of ‘Australian ADI’, ‘externally-administered body corporate’ and ‘securities’. Sub‑regulation 40-5.09(3) also makes reference to the definitions of ‘debenture’ and ‘managed investment scheme’ in the Corporations Law.
The amending Regulations amended item 10 of sub-regulation 40-5.09(3) and the Dictionary to the Principal Regulations by replacing all references to the Corporations Law with references to the equivalent provisions in the Corporations Act.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
A preliminary assessment of the compliance costs of the amending Regulations found the expected compliance costs for taxpayers to be low. Accordingly, a Regulation Impact Statement was not required and has not been prepared.
Although no formal public consultation was undertaken, the issue was raised by a member of the public on the Tax Issues Entry System (TIES) website, an online mechanism though which members of the public can raise issues relating to the care and maintenance of the tax and superannuation systems. No specific consultation was undertaken on these Regulations as the change is a minor technical amendment to provide clarity and for the avoidance of doubt. It will not impact on the operation of the GST law
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Overview
The A New Tax System (Goods and Services Tax) Amendment Regulations 2011 (No. 1) were enacted to address the problem of outdated references within the A New Tax System (Goods and Services Tax) Regulations 1999, which still referenced the repealed Corporations Law rather than the current Corporations Act 2001. This issue was identified as a minor technical inconsistency that could lead to confusion and was brought to attention by a member of the public through the Tax Issues Entry System (TIES) website. The purpose of the amending regulations is to update these references to ensure the GST regulations are aligned with current legislative terminology, thereby providing clarity and avoiding any ambiguity in the application of the GST law.
The amending regulations were issued under the authority of the Assistant Treasurer and Minister for Financial Services and Superannuation and commenced on the day after their registration on the Federal Register of Legislative Instruments. This change was considered a minor technical amendment that would not impact the operation of the GST law significantly. Consequently, a Regulation Impact Statement was deemed unnecessary, and no formal public consultation was undertaken. The expected compliance costs for taxpayers were assessed as low, reflecting the minimal practical impact of these amendments.
Scope and Application
The A New Tax System (Goods and Services Tax) Amendment Regulations 2011 (No. 1) pertains to the updating of references within the A New Tax System (Goods and Services Tax) Regulations 1999 to reflect the legislative transition from the Corporations Law to the Corporations Act 2001. This regulatory amendment applies to entities and individuals subject to the GST Act, including Australian and foreign businesses, financial institutions, and consumers, as well as those involved in corporate governance and financial reporting. Geographically, the application of these regulations is national, given the federal nature of the GST regime in Australia. The regulations do not introduce new obligations or alter existing tax liabilities but ensure regulatory consistency by updating references to the Corporations Act, thereby maintaining the integrity and clarity of the GST legislative framework. The amendment is a technical update and is not expected to impose significant compliance costs, reflecting the minor nature of the changes. The regulations commenced on the day after their registration on the Federal Register of Legislative Instruments.
Key Provisions
The main operative sections of the A New Tax System (Goods and Services Tax) Amendment Regulations 2011 (No. 1) focus on updating references in the A New Tax System (Goods and Services Tax) Regulations 1999 (Principal Regulations) from the Corporations Law to the Corporations Act 2001. Specifically, Section 177-15 of the A New Tax System (Goods and Services Tax) Act 1999 empowers the Governor-General to make regulations necessary for the Act's implementation. The amending Regulations update these references to ensure consistency and clarity in the application of GST law in relation to corporations.
These amendments require that definitions and references previously tied to the Corporations Law, such as those for ‘Australian ADI’, ‘externally-administered body corporate’, and ‘securities’, are now aligned with the corresponding provisions in the Corporations Act 2001. This includes modifying sub-regulation 40-5.09(3) to replace references to ‘debenture’ and ‘managed investment scheme’ in the Corporations Law with their equivalents in the Corporations Act. The Regulations also adjust the Dictionary in the Principal Regulations accordingly.
The Regulations impose an obligation on the entities and parties governed by the GST law to ensure that their practices and documentation reflect these updated references. For instance, when determining the applicability of GST to certain corporate transactions, entities must now refer to the updated definitions and provisions in the Corporations Act rather than the outdated Corporations Law. This ensures that the interpretation and application of GST regulations remain accurate and legally compliant.
Failure to comply with these updated references in the Principal Regulations could potentially lead to misunderstandings or misinterpretations of the GST law in relation to corporate entities. While no specific offences or penalties are outlined for non-compliance with these amendments, any resultant discrepancies in tax reporting or corporate governance could be subject to scrutiny by the Australian Taxation Office. This might lead to further inquiries or corrective actions to ensure compliance with GST requirements.