The ATO on Thur 7.11.2013, released Practice Statement Law Administration PS LA 2013/6 to outline the ATO’s policy in relation to indirect tax sharing arrangements for the collection from GST groups and joint ventures, and other entities.
The PS LA states that a group liability (including joint ventures and other entities) will be recorded on a representative member’s Integrated Client Account, and consideration will be given to the tax period or periods for which that member was a part of the group or whether it is excluded from the joint and several liability rules. It states that although a representative member of a group takes on responsibility for payment of the group’s indirect tax amounts, each member of the group is jointly and severally liable for those debts.
For tax periods commencing on and after 1 July 2010, indirect tax sharing arrangements may be entered into between the representative member and one or more members to limit the exposure to an indirect tax debt under joint and several liability. The PS LA notes that the representative member’s exposure to the debt cannot be limited by tax sharing arrangements and remains liable to the full extent of the debt.
[LTN 216, 7/11/13]