A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination (No. 7) 2004 - American Express International Inc. KR 1025 Electronic Data Feed

Administered by Department of the Treasury

Legislation au F2005B01853 Not in force Legislative Instrument

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COMMONWEALTH OF AUSTRALIA

 

A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 (CTH)

 

DETERMINATION:

 

I, Anthony Long in the exercise of the powers and functions conferred upon me, by delegation from the Commissioner of Taxation pursuant to section 8 of the Taxation Administration Act 1953 (Cth), do hereby determine under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999:

Citation

1.   This determination is the A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination (No. 7) 2004 - American Express International Inc. KR 1025 Electronic Data Feed.

Commencement and application

2.  (1)  This determination commences on 1 July 2004.                                 

(2)  This determination terminates the A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination 2003 – members of AMERICAN EXPRESS INTERNATIONAL (the "predecessor determination").       

(3)  This determination does not revoke or vary any other previous                              determination made by the Commissioner or a delegate of the                                           Commissioner.

(4)  This determination applies in relation to net amounts for tax periods starting on or after 1 July 2004.

(5) The predecessor determination ceases to apply in relation to net                              amounts for tax periods starting on or after 1 July 2004.

Circumstances where the requirement for a tax invoice does not apply

3.   The circumstance set out in the following paragraphs is the circumstances of a kind in which the requirement for a tax invoice under subsection 29-10(3) of the Act does not apply.

4.   A Member of American Express International Inc. that holds a daily or monthly   KR 1025 electronic data feed will not be required to hold a tax invoice, for a creditable acquisition purchased with the Corporate Card, in order to attribute an input tax credit on the acquisition, to a tax period, provided that at the time the Member gives its GST return/Business Activity Statement (‘BAS’) for the tax period to the Commissioner:

(a)          The Member holds a daily or monthly KR 1025 electronic data feed produced by American Express International Inc. that includes the following details:

(i)            The name of the Member;

(ii)         The name(s) of the person(s) who use(s) the American Express International Inc. Corporate Card to purchase the creditable acquisition;

(iii)       The Australian Business Number (‘ABN’) or address of the Member;

(iv)        For each acquisition for which the Member may claim an input tax credit the daily or monthly KR 1025 electronic data feed has:

  • the date the Member purchased the acquisition;
  • the supplier’s name;
  • the supplier’s ABN;
  • the supplier’s Branch Registration Number (where applicable);
  • the supplier’s industry code;
  • the amount of GST paid; and
  • the total amount paid; and

 

(b)          The Member has an effectively regulated corporate policy for making adjustments for expenditure on the Corporate Card that is of a private or domestic nature and were not made in connection with carrying on the Member’s enterprise;

 

(c)          The Member has supplementary documentation supporting each acquisition on the daily or monthly KR 1025 electronic data feed that has a private or domestic component and the documentary evidence clearly identifies the creditable and non-creditable components of the acquisition;

 

(d)          American Express International Inc. meets the conditions set out in paragraph 5 and 6 below.

5.   American Express International Inc. must provide the date each supply on the daily or monthly KR 1025 electronic data feed was purchased.

6.   Where all the information required on the daily or monthly KR 1025 electronic data feed is not provided by the merchant to American Express International Inc., the latter may, until 30 June 2006, separately obtain the supplier’s ABN and GST registration status and then calculate the amount of GST on the supply provided American Express International Inc.:

(a)          has obtained a signed statement from each merchant that states:

(i)            the merchant’s ABN and Branch Registration Number (where applicable);

(ii)         whether or not the merchant is registered for GST;

(iii)       the type of supply or supplies (i.e., taxable, GST-free and/or input taxed) the merchant provides;

(iv)        where the merchant only provides taxable supplies, whether or not GST is calculated at 1/11th of the price for all the taxable supplies the merchant provides; and

(v)          provides American Express International Inc. with an undertaking that it will be notified –

  • when they cease to be registered for GST; or
  • when they cease to make only taxable supplies where the GST is calculated at 1/11th of the price;

 

(b)          retains the signed statement for at least 5 years after the merchant ceases their association with American Express International Inc.;

 

(c)          clearly identifies each supply in the daily or monthly KR 1025 electronic data feed that may be a GST-free, input taxed or mixed supply;

 

(d)          clearly identifies each supply where GST may not be 1/11th of the price; and

 

(e)          where a supply has been identified as being a supply that may be a GST-free, input taxed or a supply where GST may not be 1/11th of the price, advises the Member to obtain a tax invoice before attributing an input tax credit to a tax period; and

 

(f)           where American Express International Inc. has obtained information that the merchant is not registered, or ceases to be registered for GST, American Express International Inc. must not calculate an amount of GST for supplies from that merchant. Instead, American Express International Inc. must state that the amount of GST included in the price of the supply is $nil.

Situations where a tax invoice is still required

7.   The Member will still need to obtain a tax invoice before attributing input tax credits to a tax period for a supply on the daily or monthly KR 1025 electronic data feed where:

(a)          the daily or monthly KR 1025 electronic data feed indicates that the supply may be a mixed supply or a taxable supply where GST is not 1/11th of the price; or

 

(b)          where there is an error on the daily or monthly KR 1025 electronic data feed in relation to the supply.

Definitions

8.  The following expressions are defined for the purposes of this determination:

The Act means the A New Tax System (Goods and Services Tax) Act 1999.

The Person(s) who uses the Corporate Card includes a partner, sole trader, director or employee of an entity.

Daily or monthly KR 1025 electronic data feed is an electronic statement of liability that is issued by American Express International Inc. to one of its clients.

Corporate Card is a card that is issued to and in the name of an entity and is used to purchase goods and services for commercial purposes.

Member is the registered entity that is a corporate holder of the American Express International Inc. Corporate Card.

Mixed supply is a supply of 1 or more taxable supplies and any one of the following supplies:

  • a supply that is GST-free or input taxed;     
  • a supply that was made before 1 July 2000.

Other expressions in this determination have the same meaning as in the Act.

 

Dated this 9th day of July 2004.

 

 

 

 

Signed by Anthony Long

ASSISTANT DEPUTY COMMISSIONER OF TAXATION
Goods and Services Tax (Financial Supplies & Insurance)  

 

Overview

The A New Tax System (Goods and Services Tax) Act 1999 (Cth) was enacted to establish a goods and services tax (GST) system in Australia, aimed at replacing various state-based taxes and creating a more streamlined and equitable taxation system. This Act was introduced to address the need for a cohesive national tax framework that could support a unified economic market. The legislation was passed by the Parliament of Australia, with the policy objective of ensuring that the GST system is efficient and fair, while also contributing to the revenue needs of the federal government. The A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination (No. 7) 2004, issued under the authority of the Commissioner of Taxation, provides specific relief to members of American Express International Inc. who use the KR 1025 electronic data feed, allowing them to attribute input tax credits without holding a traditional tax invoice, provided certain conditions are met. This waiver aims to streamline the GST compliance process for these entities, making it more efficient while ensuring that the integrity of the GST system is maintained.

Scope and Application

The A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination (No. 7) 2004 - American Express International Inc. KR 1025 Electronic Data Feed applies to members of American Express International Inc. who possess a daily or monthly KR 1025 electronic data feed. This legislation waives the requirement for a tax invoice under certain conditions, specifically for creditable acquisitions purchased with the Corporate Card, provided the member adheres to specific stipulations. These include possessing a KR 1025 electronic data feed that contains detailed information about the acquisition, holding supplementary documentation that differentiates between creditable and non-creditable components of acquisitions with private or domestic elements, and implementing a corporate policy for adjustments related to private or domestic nature expenditures. The determination applies to tax periods beginning on or after 1 July 2004 and replaces a predecessor determination. It does not revoke or alter any previous determinations made by the Commissioner or a delegate. American Express International Inc. must also meet certain conditions, such as providing purchase dates for supplies and handling instances where merchants do not supply all necessary information. Situations remain where a tax invoice is still required, such as when a supply is indicated as mixed or when there is an error on the electronic data feed.

Key Provisions

The A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination (No. 7) 2004, issued under the authority of the Commissioner of Taxation, specifies circumstances where the requirement for a tax invoice under the A New Tax System (Goods and Services Tax) Act 1999 (the Act) does not apply to Members of American Express International Inc. This determination came into effect on 1 July 2004 and replaces the A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement Determination 2003 – members of American Express International, while not revoking or varying any other previous determination. It applies to net amounts for tax periods starting on or after 1 July 2004. Members of American Express International Inc. holding a daily or monthly KR 1025 electronic data feed are exempt from the requirement to hold a tax invoice for creditable acquisitions purchased with the Corporate Card to attribute an input tax credit, provided certain conditions are met. These conditions include the data feed containing specific details such as the Member's name, the names of the individuals using the Corporate Card, the Member's ABN or address, the date of each acquisition, the supplier's name, ABN, Branch Registration Number (where applicable), industry code, the amount of GST paid, and the total amount paid. Additionally, the Member must have a regulated corporate policy for adjusting private or domestic nature expenditures and supplementary documentation that clearly separates the creditable and non-creditable components of acquisitions with a private or domestic component. American Express International Inc. must also meet specific conditions, such as providing the date of each supply on the data feed and obtaining necessary information from merchants when required. Despite the waiver, a tax invoice is still necessary in certain situations. This includes when the KR 1025 data feed indicates that the supply may be a mixed supply or a taxable supply where GST is not calculated at 1/11th of the price, or when there is an error on the data feed concerning the supply. Furthermore, American Express International Inc. has specific obligations, such as obtaining a signed statement from each merchant regarding their ABN, GST registration status, and the nature of supplies provided, and clearly identifying supplies that may be GST-free, input taxed, or where GST is not calculated at 1/11th of the price. Non-compliance with the requirements set out in this determination can result in various consequences. The Act may impose penalties for incorrect or false statements, which can include fines up to the greater of $5,250 or three times the benefit obtained, or in the case of a continuing failure, up to $21,000 or five times the benefit obtained. Additionally, members who fail to attribute input tax credits correctly may face audits and further scrutiny from the Australian Taxation Office, potentially leading to additional penalties and interest on any underpaid tax.

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