The Australian Government will move some minor amendments in the Senate concerning the GST integrity measure dealing with the offshore supply of rights and options contained in Schedule 3 of Tax Laws Amendment (2005 Measures No. 1) Bill 2005.
The Bill ensures, among other things, domestic tour operators are not disadvantaged compared to some foreign operators when offering the same goods or services for consumption in Australia, such as holiday packages.
The Government proposes to:
- apply the measure on and from 1 October 2005 to allow additional time for affected entities to prepare for the changes; and
- allow non-resident enterprises affected by the Bill that are unregistered to remain unregistered, or if currently registered to deregister for GST purposes. Enterprises that choose to be unregistered will effectively be input taxed. Non-resident enterprises that wish to deregister, may do so in the period 1 July 2005 until 30 September 2005.
The Bill will continue to achieve the tax integrity objectives of the Government. The amendments will address several issues raised by industry representatives during consultations. Integrity measures are not subject to consultation prior to introduction.
The measure will prevent non resident enterprises from claiming full input tax credits relating to supplies connected with Australia where they do no remit GST on the taxable supplies they make.
Under the amendments, affected non-resident enterprises that choose to deregister will not be able to claim input tax credits.
'The changes will allow currently registered non-resident tour operators sufficient time to deregister prior to the changes to the GST law applying and will reduce compliance costs for the affected non resident enterprises', Mr Brough said.