a new tax system (ants)
DESCRIPTION
A NEW TAX SYSTEM (ANTS). A New Tax System is the name given to the range of new tax reforms due to commence on 1 July 2000. Major elements of ANTS include; Pay As You Go (PAYG), and GST. PAYG WHAT IS IT?. - PowerPoint PPT PresentationTRANSCRIPT
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• A New Tax System is the name given to the range of new tax reforms due to commence on 1 July 2000.
• Major elements of ANTS include;– Pay As You Go (PAYG), and– GST.
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PAYG is simply a new withholding tax system. It applies from 1 July 2000. It is intended to replace:
- PAYE (Pay As You Earn system); - PPS (Prescribed Payments System);- RPS (Reportable Payments System);- Provisional Tax;- Company instalments system.
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• GST is a broadly based consumption tax, which aims to tax “private final consumption” expenditure on most goods and services.
• It applies from 1 July 2000
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• GST eliminates:- Wholesale Sales Tax from 1 July 2000- Bed taxes from 1 July 2000;- FID from 1 July 2001- Stamp Duty on marketable securities
from 1 July 2001;BAD Tax 1 July 2005;
• Abolition of remaining business stamp duties deferred indefinitely.
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GST applies to “taxable supplies”, ie;
• supplies of goods and services,
• connected with Australia,
• by a registered person,
• in the course of furtherance of an enterprise,
• for a consideration;
A supply is not a taxable supply if it is “GST-free” or “input taxed”.
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GST is:
- applied to domestic consumption of most goods and services,
- collected at every stage of production,
and therefore
- paid by final consumer.
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As an offset to the GST, Personal Income Tax rates change from 1 July 2000
Annual Salary Rate
• $0 - $6,000 0%• $6,001 - $20,000 17%• $20,001 - $50,000 30%• $50,001 - $60,000 42%• $60,001 + 47%
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• Taxable supplies- 10% GST on sales, and- full credit for GST paid on inputs.
Types of GST supply
• Input taxed supplies- 0% GST on sales, but- no credit for GST paid on inputs.
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Types of GST supply (Cont.)
• GST free supplies- 0% GST on sales, and- full credit for GST paid on inputs.
• Out of scope- Intra-CSU supplies - internal trading.
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• Persons/organisations must register if -
- they carry on a business enterprise (excluding PAYE activities, hobbies, voluntary activities), and
- their annual gross turnover exceeds $50,000 or $100,000 for non profit bodies,
(must register to claim input tax credits).
• 90% common owner enterprises may group and lodge one GST return.
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Registration Treatment
• A registered enterprise will:- be able to claim input tax credits for goods
and services purchased, and must- charge 10% GST on goods and services sold.
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Registration Treatment
• An unregistered enterprise will:- not be able to claim input tax credits for
goods and services purchased, - not charge 10% GST on goods and
services sold, and - have 48.5% of gross sale amount withheld
and forwarded to the ATO.
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Accounting Treatment
• Accounting for GST is on an accruals basis where the enterprise’s annual turnover > $1M
- The GST is accounted for at the earlier of the issue of a taxable invoice, or the receipt of the payment.
- CSU will account for GST through 2 clearing accounts (Input Credits &
GST Liability) - budget units won’t bear the cost.
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Accounting Treatment (Cont.)
• Where the annual turnover is less than $1 million, an enterprise can choose to account for GST on a cash basis
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GST Tax Periods
• GST paid on inputs, and collected on taxable supplies are attributable to tax periods.
• A tax period is either monthly or quarterly.• CSU turnover exceeds $20 million pa, and
will lodge GST monthly electronically.• GST returns to be lodged by 21st of each
month, even if net amount is $0.
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The PAYG system provides for a Business Activity Statement (BAS)
• BAS is prepared either monthly or quarterly, depending upon the entities annual turnover, and is lodged by the 21st of the next month.
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The Business Activity Statement (BAS)
• BAS contains the total GST to be paid or collected plus the total amount of taxes withheld under the PAYG system.
• One BAS return is made for the entire registered entity. It will be prepared the Department of Finance.
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A Tax Invoice must:
• be issued by the supplier for taxable supplies greater than $50; and
• contain the entities ABN ; and
• set out the GST inclusive price for the supply; and
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Tax Invoice (Cont.)
• be in the approved form; and
• be provided within 28 days.
(A receipt may be construed as a Tax Invoice)
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Education courses that are GST free
• pre school course
• primary course
• secondary course
• tertiary course
• Masters or Doctorial course
• special education course
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Education courses that are GST free
• adult and community education course
• English language course for overseas students
• first aid or life saving course
• professional or trade course
• tertiary residential college course
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GST Free Supplies (Teaching):.
• Local / International students, enrolled in:
- undergraduate award programs
- postgraduate award programs• International exchange students• Course materials• Field Trips (excl. meals & accommodation)
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Taxable Supplies (Teaching):• “miscellaneous students”
- (students not enrolled in award program, who undertake particular but isolated subjects)
• voluntary students
- (students enrolled in award program, who undertake a subject in addition to award course)
• Sale, lease or hire of goods (incl. textbooks)• Accommodation and food for field trips
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GST free Supplies:
• Research & Consulting Services
- grants must be unconditional to be GST free.
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Taxable Supplies:
• Contract research - funding is provided by private sector on a contract basis (ATO ruling Nov. 1999)
• Commercialisation of intellectual property• Consulting services made on a fee paying basis
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GST free Supplies (Students):
Administrative services directly related to supply of GST free education courses only.
• enrolment services• examination arrangements• counselling services• graduation ceremonies
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Taxable Supplies (Students):
• administrative services related to the supply of taxable education courses.
• Student Activities Fees (Union fees, Sports Associations, etc)
• Other supplies not related to GST free courses, ie services provided to external bodies.
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GST free Supplies (Library):
• No GST on all services provided free of charge, eg Book Loans.
• No GST on intra university loans
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Taxable Supplies (Library):
• Printing, photocopying, laminating• Internet/Email provided to students for a fee
• Equipment hire and information retrieval services provided to students for a fee
• Library Fines
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Taxable Supplies:• Short term accommodation provided to non-
students• Prepared food supplied as part of
accommodation• Vending machines for telephones, photocopiers,
laundry machines and food dispensers.
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Input Tax Supplies:• Accommodation provided in Halls of
Residence to tertiary and post graduate students.
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Taxable Supplies:• Catering and conferencing facilities supplied to parties
external to the University.• Commissions received from payroll deductions (eg
Health Funds, Unions and Insurance premiums).
Input Tax Supplies:• Student Loans and any additional charges incurred.
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