October 2015 update

GST on all (taxable) online transactions from 1 July 2017

The (now former) Treasurer recently announced that the States and Territories had unanimously agreed in principle to reduce the GST threshold on imported goods and services (currently at $1,000) to zero.

The new arrangements will apply from 1 July 2017. He said that he had put forward a proposal that relies on a vendor registration model as a method of collecting the GST. As goods would not be stopped at the border, administering a vendor registration model would have a relatively low cost.

Non-residents (overseas suppliers) will be the ones who charge, collect and remit the GST for digital and physical products. As is the case in Australia, only vendors with an Australian turnover of at least $75,000 will need to register and charge the GST.

Holiday rentals under the microscope

The ATO has advised that it is sending letters to taxpayers in approximately 500 postcodes across Australia, reminding them to only claim the deductions they are entitled to, for the periods a holiday home is rented out, or is genuinely available for rent.

They advise that, to avoid making mistakes on their tax return, property owners should:

• keep accurate records to ensure they declare the right amount of rental income and have evidence for claims made; and

• only claim deductions for the periods the property is rented out, or is genuinely available for rent.

• If a property is rented at below market rates, for example to family or friends, claims for deductions must be limited to the income earned while rented.

Credit and debit cards data-matching program

The ATO has announced that it will conduct a data-matching program on credit and debit card transactions for the 2012/13 and 2013/14 years.

Data will be collected from the following financial institutions:

• American Express Australia Limited;

• Australia and New Zealand Banking Group Limited;

• Bank of Queensland Limited;

• Bendigo and Adelaide Bank Limited;

• BWA Merchant Services Pty Ltd;

• Commonwealth Bank of Australia;

• Diners Club Australia;

• National Australia Bank Limited;

• St George Bank; and

• Westpac Banking Corporation.

Based on previous programs, it is estimated that over 8 million records will be acquired, relating to over 940,000 merchants. These records are linked to approximately 90,000 individuals and 850,000 non-individuals.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.