January 2018

Are you?
– A taxpayer who has gambling sales?

At a glance:
– Gambling supplies are taxable sales and therefore it affects your activity statement.
– Check which method you should use to account for your gambling sales.

You should: 
– Contact us if you require any clarification or advice

In general, gambling supplies includes the following:

• Taxable sales that supply a ticket in a lottery, raffle or similar activity; or
• Taxable sales that involve taking bets on gambling events such as racing, gaming or sporting events;
• Casino gambling operations;
• Operating gaming machines in clubs and hotels; and
• Conducting bingo activities.

If taxpayers conduct gambling events and are registered for GST, they can claim GST credits on the GST included in the price of any non-monetary prizes they purchase. They are not entitled to GST credits for monetary prizes they provide or non-monetary prizes they provide that were donated to them.

Taxpayers may use either the calculation worksheet method or the accounts method to complete the relevant boxes on their activity statements for the reporting period.

The amounts taxpayers report on the activity statement will depend on the accounting basis they have chosen or are required to use. Taxpayers can account on a cash basis or a non-cash basis.

If taxpayers pay only cash prizes, they need to report their margin from gambling supplies for the reporting period at G1 (total sales).

If taxpayers provide non-cash prizes for their gambling supplies, they need to include the gross proceeds from their gambling supplies at G1 (total sales). The value of these prizes could not be deducted from the gross proceeds.

For more information, click here

Remember:
– Include the purchase of non-cash prizes at G10 (Capital purchases) or G11 (non-capital purchases) on the activity statement.

This article was published on 31/12/2017 and is current as at that date

Are you?
– Buying or selling any vouchers?

At a glance:
– If you sell or buy vouchers, you should use the correct method to report GST in your activity statement.
– Determine which method you should use to report GST on your vouchers.

You should: 
– Contact us if you require any clarification or advice.

A voucher includes a token, stamp, coupon or similar article that has a stated monetary value, which can be redeemed for goods or services in accordance with its term.

In general, taxpayers report the full price of the sale (including the value of the voucher if it is fully redeemed and any additional payment received) at label G1 (total sales) on activity statement when the voucher is redeemed for a choice of goods or services, not the reporting period in which it is sold.

Similarly, if a taxpayer buys a voucher and is entitled to an input tax credit for the goods or services, he could not claim the credit unless he redeems the voucher for taxable supplies.

However, for those vouchers that entitle the holder to redeem a specific product or service, GST is recognised when the voucher is issued.

If the voucher is purchased for making input taxed sales or has a private nature, the taxpayer is not entitled to claim a GST credit for that purchase.

For more information, click here.

Remember: – Ensure you report the GST in the correct tax period.

This article was published on 31/12/2017 and is current as at that date

Are you?
– Considering selling or purchasing a commercial property?

At a glance:
– The sale of a commercial property may be GST-free if certain requirements are satisfied.
– Check whether the transaction meets the criteria of the going concern exemption and that both party agree to recognise the sale as going concern.

You should: 
– Contact us if you require any clarification or advice.

If a commercial property is being sold as part of a GST-free sale of a going concern, GST does not apply to the property.

In this case, there is no GST on the property sale but both the seller and purchaser may be able to claim GST on expenses related to the selling and purchasing of the property.

A sale of a going concern may be GST-free if it meets the following requirements:

• The supply includes all of the things necessary for the business to continue operating;
• The business is carried on until the day of sale;
• A payment or consideration is made for the supply;
• The buyer is registered for GST; and
• The seller and the buyer have agreed in writing to apply the going concern exemption.

By applying going concern exemption, the purchaser can save on stamp duty costs, as stamp duty is calculated on the GST inclusive purchase price. Also, there may be cash flow benefits as purchaser does not have to pay extra to cover the GST and then claim it back from the Tax Office.

For more information, click here.

Remember:
– If the Tax Office does not consider the transaction as a sale of a going concern at a later date, the seller will be required to remit the GST to the Tax Office.

This article was published on 31/12/2017 and is current as at that date

Are you?
– A taxpayer supplying animals or meat for human consumption?

At a glance:
– The Tax Office shows that there is a difference in goods and services tax (GST) implications between sale of animals and sale of meat for human consumption.
– Be aware of the different GST implications.

You should: 
– Contact us if you require any clarification or advice.

Sales of animals are subject to goods and services tax (GST) while sales of meat for human consumption are GST-free.

If meat is inspected by an authorised person, and is either stamped or passed as food for human consumption, it is GST-free.

Sales of livestock or game taxpayers make to processors are subject to GST. This is the case even if the sale is under an arrangement where ownership of the livestock or game passes to the processor only after it becomes food for human consumption.

Abattoirs, wholesalers and butchers purchase livestock or game under various arrangements, including:

• Sales under direct consignment to a processor;
• Contract or service kills;
• Auction sales; and
• Sales from one producer to another.

If a taxpayer sells livestock at auction, the sale will be subject to GST if he is registered or required to be registered for GST.

If the taxpayer is a hobby farmer, he cannot register for GST because of not carrying on an enterprise. Then GST could not be included in the price of the livestock or game he sells.

For more information, click here.

Remember:
– Livestock or game you sell directly to a processor is subject to GST, regardless of the method you use to work out the sale price.

This article was published on 31/12/2017 and is current as at that date