Goods and Services Tax: Application of Intermediary Arrangements to the Multi-Media Industry Determination (No. 33) 2015
Explanatory Statement
General Outline of Instrument
- This determination is made under section 153-65 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
- The determination allows supplies or acquisitions made by an entity (the intermediary) on behalf of another entity (the principal) to be taken as supplies or acquisitions made in accordance with a Subdivision 153-B of the GST Act arrangement.
- The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect
4. The determination commences on the day after registration.
5. The determination does not apply retrospectively.
What is this instrument about
6. The Commissioner under section 153-65 of the GST Act can determine that supplies or acquisitions of a specified kind that an entity (the intermediary) makes on behalf of any other entity (the principal) are taken to be supplies or acquisitions made in accordance with an arrangement of a kind referred to in section 153-50 of the GST Act
7. Paragraph 93 of GSTR 2000/37 Goods and services tax – agency relationships and the application of the law, provides that the Commissioner may make a determination in relation to industries which have one or more of the following features:
- a significant number of intermediaries;
- a significant number of principals; or
- difficulties in obtaining written agreement.
- This determination is in relation to the distribution multi-media products. This includes supplies of multi-media products made through retailers and distributors of those products including but not limited to newsagents, supermarkets, convenience stores and delivery agents.
- Supplies of multi-media products include but are not limited to:
- magazines;
- journals;
- newspaper;
- long-term publications;
- calendars;
- computer software (including compact discs); and
- products that are provided as ‘add on’ or extension products to the products listed above.
- Supplies of multi- media products does not include:
- lottery tickets or similar products of a gambling nature; or
- phone cards.
What is the effect of this instrument
11. The effect of this determination is to treat intermediaries and principals who are involved in making supplies and acquisitions of the specified kind as having agreed to adopt the arrangements referred to in section 153-50 of the GST Act.
12. This requires the intermediary and principal to account for GST on the basis of, principal to principal, in relation to the specified supplies and acquisitions. That is, a taxable supply that the principal makes to a third party through the intermediary is treated under this determination as a taxable supply by the intermediary to the third party. In addition the principal is taken to make a taxable supply to the intermediary and the intermediary is taken to have made the corresponding creditable acquisition.
13. This determination applies to intermediaries and principals in simple, two party relationships and also intermediaries and principals in more complex arrangements involving sub-intermediaries.
14. However, in accordance with subsection 153-65(2) of the GST Act the intermediary, the principal, or both, may notify the other in writing that this determination does not have effect.
15. 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
16. This determination replaces the A New Tax System (Goods and Services Tax) Application of Agency Arrangements to the Multi-Media Industry Determination (No. 1) 2000
Consultation:
17. 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.
18. There is no substantive change from the previous instrument therefore the instrument is considered minor or machinery in nature.
19. As such, no further consultation has been undertaken in the development of this instrument.
James O’Halloran
Deputy Commissioner of Taxation
15 September 2015
Legislative references:
A New Tax System (Goods and Services Tax) Act 1999
Legislative Instruments Act 2003
Human Rights (Parliamentary Scrutiny) Act 2011
Statement of Compatibility with Human Rights
This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Goods and Services Tax: Application of Intermediary Arrangements to the Multi-Media Industry Determination (No. 33) 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 allows supplies or acquisitions made by an entity (the intermediary ) on behalf of another entity (the principal) to be taken as supplies or acquisitions made in accordance with an arrangement under Subdivision 153-B of the GST Act. That is, a taxable supply that the principal makes to a third party through the intermediary is treated under this determination as a taxable supply by the intermediary to the third party.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms as it is considered to be minor or machinery in nature and does not substantially change the law.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.