c s u 1. 2 a new tax system is the name given to the range of new tax reforms due to commence on 1...

1C S

U

2C S

U

• 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.

3C S

U

4C S

U

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.

5C S

U

6C S

U

• 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

7C S

U

• 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.

8C S

U

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”.

9C S

U

GST is:

- applied to domestic consumption of most goods and services,

- collected at every stage of production,

and therefore

- paid by final consumer.

10C S

U

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%

11C S

U

12C S

U

• 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.

13C S

U

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.

14C S

U

15C S

U

• 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.

16C S

U

17C S

U

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.

18C S

U

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.

19C S U

20C S U

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.

21C S U

Accounting Treatment (Cont.)

• Where the annual turnover is less than $1 million, an enterprise can choose to account for GST on a cash basis

22C S U

23C S U

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.

24C S U

25C S U

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.

26C S U

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.

27C S U

28C S U

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

29C S U

Tax Invoice (Cont.)

• be in the approved form; and

• be provided within 28 days.

(A receipt may be construed as a Tax Invoice)

30C S U

31C S U

Education courses that are GST free

• pre school course

• primary course

• secondary course

• tertiary course

• Masters or Doctorial course

• special education course

32C S U

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

33C S U

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)

34C S U

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

35C S U

GST free Supplies:

• Research & Consulting Services

- grants must be unconditional to be GST free.

36C S U

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

37C S U

GST free Supplies (Students):

Administrative services directly related to supply of GST free education courses only.

• enrolment services• examination arrangements• counselling services• graduation ceremonies

38C S U

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.

39C S U

GST free Supplies (Library):

• No GST on all services provided free of charge, eg Book Loans.

• No GST on intra university loans

40C S U

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

41C S U

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.

42C S U

Input Tax Supplies:• Accommodation provided in Halls of

Residence to tertiary and post graduate students.

43C S U

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.

44C S

U