GST Compliance Measures -  Federal Budget 2010

Following Treasury’s consultation to review the application of GST and identify opportunities to reduce complexities and compliance costs, the Government proposed the following changes:

• to increase the financial acquisitions threshold input tax credit test from $50,000 to $150,000 effective from 1 July 2010; 
• to simplify the treatment of hire purchase agreements by removing the need to apply different GST treatments to different parts and allowing these to be treated as one taxable supply. Additionally, the attribution rules for hire purchase arrangements will be streamlined for both cash and non-cash GST taxpayers. The changes to hire purchase agreements will take effect from 1 July 2010; 
• to expand the range of expenses qualifying for a reduced input tax credit (RITC) to include acquisitions related to supplies of life insurance by superannuation funds to their members; 
• to clarify the application of the margin scheme by 1 July 2012.

The Government has also announced that it will implement all the recommendations relating to the application of GST to cross-border transactions, effective from 1 July 2012.

Those recommendations include a reduction in the number of non-residents who are unnecessarily drawn into Australia’s GST net by limiting the “connected with Australia” provisions, an extension of the GST-free rules for cross-border supplies and the expansion of the compulsory reverse charge provision.

Overview

Small Business Measures

Individuals - Impacts of the Budget  including:
Personal Tax
Low Income Tax Offset
Work-related Expenses
Interest Income
Medicare Levy and Medical Expenses Rebate
Home Saver Account
Superannuation

We hope that you have found this commentary surrounding the 2010 Federal Budget release of benefit.  The information provided is a general guide only and Bentleys accepts no responsibility for the accuracy of the information or opinions contained herein. The contents do not constitute business, accounting, taxation or financial advice and should not be relied upon as such.