Cross-border business-to-business (B2B) GST reforms commenced on Saturday, 1 October 2016.
They were introduced in the Tax and Superannuation Laws Amendment (2016 Measures No 1) Act 2016, which received Royal Assent on 5 May 2016.
- Under the changes, the GST Act has been amended to better target the way Australia’s GST rules apply to cross-border supplies that involve non-resident entities.
- The amendments are designed to prevent non-resident businesses inappropriately being drawn into the Australian GST system unnecessarily through B2B transactions.
- The changes seek to reduce the need for non-residents to register for GST in Australia (to either remit GST or claim credits) as a result of B2B transactions which are ultimately revenue neutral.
- The changes apply to taxable supplies in determining net amounts for tax periods that commence from the second quarterly tax period starting after Sch 2 to the Bill receives Royal Assent ie from 1 October 2016.
Other GST changes in the Bill commence on 1 July 2017.
These concern the GST treatment of digital products and other services to Australian consumers (B2C supplies).
- The GST Act has been amended to ensure that digital products and other imported services supplied to Australian consumers by foreign entities are subject to GST in a similar way to equivalent supplies made by Australian entities.
- The changes apply in determining net amounts for tax periods starting on or after 1 July 2017. For supplies made over a period spanning this date, the amendments apply to that portion of the supply made after 1 July 2017
[LTN 187, 27/9/16]