Importantly, the Australian Taxation Office (ATO) has confirmed that there is no substantive change to its interpretation of the underlying goods and services tax (GST) law, commonly known as the ‘Netflix Tax’.

Instead, the draft ruling clarifies and expands upon the existing guidance by addressing both parts of the Australian consumer test, incorporating the safeguard approach, and expanded compliance guidance.

Residency and consumer elements – greater focus on consumer limb

The definition of an Australian consumer remains unchanged and continues to require both the residency element and the consumer element to be satisfied. That is that the recipient is an Australian resident for income tax purposes and is either not registered for GST, or if registered, does not acquire the supply for the purpose of an enterprise.

However, GSTR 2026/D1 significantly expands on the consumer element, which was only lightly addressed in GSTR 2017/1. The earlier ruling focused more heavily on residency indicators, such as billing address and IP data, with comparatively limited practical guidance on GST registration and the purpose of acquisition.

The draft confirms that where a recipient provides an Australian business number (ABN) and represents to the supplier that they are registered for GST, a supplier may rely on that representation not only to establish GST registration, but also to conclude that the acquisition is made for enterprise purposes.

The safeguard approach under section 84-100

A central feature of the draft is the clearer articulation of the ‘safeguard approach’ under section 84-100. While not new, it is now framed as a more structured methodology for forming a reasonable belief about whether a recipient is not an Australian consumer.

This approach provides a pathway for suppliers to treat a supply as ‘not made to an Australian consumer’, provided they:

• collect specified information (e.g. ABN, declarations that the recipient is registered for GST)
• maintain consistent records
• apply defined system controls.

The key being that the supplier has undertaken all reasonable steps to form its conclusion.

Where the safeguard approach is followed, a greater level of certainty and protection is provided to the supplier, particularly for automated or high-volume environments where individual review is impractical.

Attribution and compliance approaches

The draft expands guidance on timing and attribution, making it clear that a recipient’s status is generally determined at the time of invoice or receipt of consideration. This is particularly important for subscription and other ongoing arrangements, where a customer’s circumstances may change over time or additional information becomes available after the initial transaction.

The draft also introduces more detailed compliance approaches, particularly in relation to the consumer element safeguard. For initial supplies to a recipient, greater leeway is provided where an ABN check indicates that the recipient is not registered, but the recipient has provided evidence of registration to the supplier.

For ongoing supplies, more structured processes are expected, including:

• ongoing monitoring (e.g. regular ABN Lookup checks at least every 6 months)
• annual GST registration verification.

The draft reiterates that suppliers may rely on comparable jurisdiction approaches (EU, UK, NZ, and Norway) for determining residency.

Where suppliers operate outside the safeguard, reliance is generally limited to information already held within their systems to determine only if the recipient acquires the supply for the purpose of its enterprise.

How SW can help

GSTR 2026/D1 does not change the legal framework, but it clearly raises expectations around how businesses implement and provide evidence of compliance. In particular, the increased focus on GST registration, the consumer element, and ongoing verification means more structured processes will be required than under GSTR 2017/1.

Businesses should review their onboarding procedures, ABN validation processes, and system controls to ensure they align with the draft and can support a defensible position if reviewed by the ATO. Early alignment with the ATO’s compliance approaches will help reduce risk and improve consistency across cross-border transactions.

The ATO has invited public comments on the draft ruling, with submissions due by 24 July 2026.

If you would like to understand how these changes may impact your cross-border GST obligations, please contact your SW advisor or speak with our GST specialists.

Contributors

Dylan Kelly | Senior Consultant, Tax

The post Know your consumer: ATO’s new draft ruling for GST cross-border supplies appeared first on SW Accountants & Advisors.

The draft ruling provides further clarity on how existing principles apply to build-to-rent (‘BTR’) developments, determining the status of occupants, and the characteristics of hostels and boarding houses.

Supply of BTR leases & status of occupants

The draft ruling provides further clarity on determining if BTR developments are residential or commercial residential premises, namely if the accommodation supplied is similar to a hotel, motel, inn, hostel or boarding house for the purposes of s195-1 (a) of the GST Act.

Several findings of a new example (Example 12A) contained in the ruling outline key criteria to be considered in determining if a BTR development is residential accommodation:

• The apartments are self-contained with bedroom, bathroom, kitchen and living facilities.
• The building includes communal spaces and amenities available to all occupants, including dining area, gym, laundry facilities etc. No shared meals or communal kitchens are provided to occupants.
• Apartments are rented to occupants on a long-term basis. Occupants have the right to quiet enjoyment of the apartment with management having limited reasons and must give reasonable notice under the lease agreement to access occupants’ apartments.

Where the above characteristics are found in an accommodation, the accommodation will not be deemed to be commercial residential premises.

This is on the basis that the nature of the accommodation is permanent, the occupants obtain exclusive possession of their self-contained apartment in the same way as a tenant, and the accommodation does not provide additional services to the occupants that a hotel would, for example.

Paragraphs 188A – 188G of the ruling provide further detail on the rights and enjoyments of a tenant compared to a guest, namely the right of exclusive possession.

Hostels & boarding houses

While the draft ruling namely provides clarification relating to BTR developments and status of occupants, it also provides updates and further clarity on the characteristics of hostels and boarding houses.

In relation to hostels, the ruling provides that while a hostel may serve as an occupant’s principal place of residence for a period of time, the occupancy is generally non-permanent or transient in nature. The hostel is used for a limited time or limited purpose (e.g. student hostel provides temporary residence during period of education) and there is no right or expectation of permanent residence.

Furthermore, the ruling provides that hostels generally have shared facilities, however, the degree of shared facilities may vary. Some hostels may only provide shared kitchen and toilet facilities, while others may provide shared sleeping, toilet, and ablution facilities.

In relation to boarding houses, the ruling includes that even if premises may meet the definition of a boarding house under specific state or territory legislation, this alone does not determine whether the premises are, or are considered similar to, a boarding house.

As such, it is imperative that the premises is determined to meet the characteristics of a boarding house as per GSTR 2012/6, and the definition of a boarding house in state or territory legislation is not solely depended on.

How SW can help

While the ATO has provided further clarity on distinguishing accommodation as residential or commercial, the application of these principles is highly fact dependent. There is no ‘one size fits all’ approach, and each accommodation should be reviewed on a case-by-case basis.

SW’s indirect tax specialists have extensive experience in advising on accommodation. If you would like to explore how the draft ruling may affect your current or planned accommodation arrangements, or if you require tailored guidance on any aspect of the ruling, please reach out to your SW advisor. Our team is ready to help you navigate these changes with confidence.

Contributors

Dylan Kelly

Robert Parker

William Zhang

The post Build-to-rent developments: ATO draft updates to GSTR 2012/6 appeared first on SW Accountants & Advisors.

The returns will be used to assess the confidence level of a taxpayer’s compliance with GST law, and their investments placed into GST governance.  

The Supplementary annual GST return will first apply to the 2024-25 financial year for those Top 100 and Top 1,000 taxpayers who received a GST assurance rating on or before 30 June 2024. The ATO will notify taxpayers if they are required to complete the return and provide the submission deadline. In the meantime, the ATO has published the form and detailed instructions so taxpayers can begin their preparation.

What information does the GST return contain?

The return contains several questions for impacted taxpayers and their advisors, including:

•  how the taxpayer has actioned ATO recommendations, areas of low assurance or red flags raised as part of the most recent review  
• how the taxpayer has maintained or increased its level of GST governance, and whether there have been any material business or systems changes that impact its GST control framework since the last review
• whether the taxpayer has undertaken any reconciliation between its audited financial statements and its annualised business activity statements
• whether the taxpayer has taken any material uncertain GST positions; and
• whether the taxpayer has identified any material GST errors in the period and how these have been rectified, and whether the taxpayer claimed any material amounts of credits in the period that were referrable to earlier periods.

Who needs to lodge?

Taxpayers who received one of the following on or prior to 30 June 2024 must lodge the annual return:

• Top 100 GST Assurance Report
• Top 1,000 Combined Assurance Review Report with a GST assurance rating
• Top 1,000 GST Streamlined Assurance Review

Due dates

Taxpayers who received a GST assurance report on or prior to 30 June 2024 must lodge the return annually from the 2024-25 financial year. The following table sets out the relevant due dates:

How SW can help

Reach out to our GST experts for help reviewing your GST governance and ensure your annual GST return is completed accurately.

Taxpayers should also review their progress on implementing action items from their last ATO assurance review as part of the process of completing the return. By executing action items, this will reinforces the ATO’s confidence in their compliance and reduces the risk of future challenges for your business.

Contributors

William Zhang

Michael Chen

Blake Trad

The post ATO increases GST engagement with Top 100 and Top 1,000 taxpayers appeared first on SW Accountants & Advisors.

My clients operate across a range of sectors, including education, IT, professional services, wholesale importing, property development and investment, and not-for-profit organisations.

I have demonstrated expertise in delivering high-quality outsourcing services to start-ups, SMEs, publicly listed companies, and Australian subsidiaries of large multinational groups.

I provide specialist advice on employment-related taxes, including GST, FBT, and salary packaging. I advise clients in the following areas:

• managing audit risk for indirect tax compliance
• payroll tax compliance and audits
• WorkCover obligations for employee and contractor arrangements
• PAYG withholding, including large withholder and foreign resident requirements
• Single Touch Payroll filing
• preparing instalment activity statements and business activity statements, and reporting to the ATO
• employee termination payments
• calculating long service leave, annual leave, and personal leave entitlements
• payroll software implementation and transition
• implementing streamlined payroll procedures to ensure accurate and timely payments to employees.

I am a Partner of SW Audit and a Director of SW Accountants & Advisors Pty Ltd.

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The Draft is intended to replace 51 separate Legislative Instruments that currently specify recipients, circumstances and requirements that enable RCTIs to be issued.  This consolidation into a single Legislative Instrument is a positive simplification and aims to enable recipients to self-assess their eligibility more easily.

Who can issue Recipient Created Tax Invoices (RCTI)?

Holding a valid tax invoice (including a RCTI) is a prerequisite to claiming input tax credits, so ensuring compliance with these requirements is fundamental to meeting GST obligations for affected taxpayers.  Usually, it is the supplier of a taxable supply (e.g. the service provider) who will issue a tax invoice to the recipient (e.g. the customer). 

However, the Commissioner has the power to specify a class of tax invoices that may be issued by the recipient of the taxable supply, rather than by the supplier. This is relevant particularly in circumstances where the value of the supply is established by the recipient rather than the supplier, including where analysis of goods must be undertaken before their value can be ascertained.

The Draft is expected to have impact on GSTR 2000/10 which sets out generic rules which allow the use of RCTIs, without the need to apply to or notify the Commissioner.  Under the Draft, recipients that may issue RCTIs, subject to satisfying the relevant requirements as set out in the Draft, are:

• a government related entity
• a large business entity
• a business entity.

The requirements that must be satisfied by a recipient depend in part on the category of entity.  Where a recipient falls into more than one category, it only needs to satisfy the requirements applicable to at least one category.

Verification of GST registration

Section 7 of the Draft sets out the relevant requirements.  In broad terms these are largely consistent with current administrative practice. However, one critical change is the requirement for a recipient to take positive action to verify that the supplier is registered for GST. This verification needs to be done each and every time a RCTI is issued. This change is significantly more onerous than the current requirement to be reasonably satisfied of the GST registration of the supplier.

Should the Draft be implemented in its current form, many businesses issuing RCTIs will need to ensure that processes are in place to satisfy this verification requirement and retain evidence to substantiate that this requirement was satisfied. 

How we can help

Submissions in relation to the Draft are required by 16 December 2022 and SW would be happy to take into consideration your comments.

The Draft will take effect the day after the final instrument is registered, which is expected in early 2023. A submission point will be to request a transition period.

However, if you currently rely on one of the existing 51 Legislative Instruments when issuing RCTIs, we advise you to revisit your existing current RCTI arrangements to confirm compliance with the Draft before it takes effect.

If you would like to discuss the Draft, or your current RCTI arrangements, please contact any of the SW tax Directors listed or your primary SW contact.

The post RCTI changes include GST verification for every issue appeared first on SW Accountants & Advisors.

Managing tax detail and compliance can be overwhelming, especially for small and medium-sized and even larger private businesses. From cloud migration to strategice planning, international business to tax and accounting compliance, we offer comprehensive tax services that help you identify and manage potential tax risks before they become a problem, maximise tax opportunities and minimise exposure, take realistic tax positions, and ensure compliance with all ATO requirements.

This way, you can focus on what matters most to you: growing your business.

Our extensive involvement in the industry and deep understanding of legislative and administrative reforms means we are actively involved and up-to-date on all current tax issues that impact businesses. Our knowledgeable teams are dedicated to ensuring that your business is fully compliant with tax regulations and optimized for the best possible tax outcomes.

We believe in providing a personal touch, so our senior engagement leaders take the time to keep you informed and answer any questions you may have. Our goal is to provide you with peace of mind, knowing that your tax affairs are being managed by experienced professionals that are an extension of your team.

The range of our services to private and unlisted businesses is extensive and includes: 

• accounting and taxation compliance
• business advisory
• business and financial structures
• corporate governance
• international business advisory
• outsourced accounting solutions
• performance improvement
• strategic planning
• succession planning.

The post Tax for Private Business appeared first on SW Accountants & Advisors.

Navigating the detail of tax can be a daunting task for businesses and finance teams, particularly for companies with complex transactions, structures and workforces. We’ll help you identify and manage tax risks, maximise opportunities and minimise exposure, take realistic tax positions and ensure compliance with all ATO requirements. 

We have a highly skilled specialist tax teams working with multinational corporations and Australian subsidiaries of overseas companies, as well as Australian and Asia Pacific firms of all sizes.  

Our significant involvement in industry and a high level of involvement in reforms, both legislative and administrative, means we are actively involved and across all current tax issues that impact business.  

We are closely involved in consultative processes, making submissions to Treasury and/or the ATO and have extensive experience managing successful ATO reviews including Combined Assurance Reviews (CARs), Streamlined Assurance Reviews (STARs) and ATO top 20 and top 100 reviews.  

Our team can provide end-to-end solutions across: 

• corporate & International tax advisory 
• Country by Country reporting 
• employment taxes (PAYG, FBT, superannuation and payroll) 
• expatriate taxes 
• FATCA / CRS 
• fuel tax credits 
• fund tax advisory 
• Government grant assistance 
• global workforce mobility services 
• GST and indirect taxes 
• tax due diligence 
• transfer pricing 
• tax structuring 
• tax effect accounting  
• tax governance implementation and review 
• tax controversy, dispute, review and audits 
• tax compliance automation 
• research and development tax incentive 
• remuneration and benefits (share schemes) 
• State taxes (Stamp Duty, Land Tax, GAIC).

The post Tax for Corporates appeared first on SW Accountants & Advisors.

COVID-19 restrictions have led to adverse trading conditions, causing some businesses to temporarily close or downsize their operations.

These range from the small CBD coffee cart in the office foyer, through to huge airlines suspending some routes.

Not all these businesses will reopen, and it is expected that many will end up being put on the market.

Implicitly, the expression “going concern” factors in more than just the mere sale of business assets. Explicitly, the GST law requires that the vendor:

• continues with enterprise operations until the day of supply; and
• supplies all things necessary for the continued operation of the enterprise.

In ruling GSTR 2002/5, the ATO has accepted that the temporary suspension of the enterprise does not disqualify the business being sold as a going concern.

However, it is critical that the enterprise can continue after the transfer of ownership, despite the purchaser not needing to continue to carry on the enterprise.

Business owners weighing up whether to resume operations or to sell the business need to be mindful of the affect their decision has on whether the business can be sold as a GST-free going concern. For example, the following actions can adversely affect eligibility:

• Changing from property development, by cancelling off-the-plan sales, and instead selling the entire vacant lot
• Selling an office building or factory on terms such as vacant possession
• Surrendering any statutory permits or licenses
• Selling plant and equipment.

It is strongly recommended that when weighing up options, business owners consider the implications of their actions on GST and taxation more generally.

How can our team assist?

Our tax experts can assist business owners to make informed decisions that factor in the whole picture, and result in the most beneficial tax outcome possible.

Reach out to our team to discuss today.

Contacts

The post Selling a business post-COVID-19 appeared first on SW Accountants & Advisors.

Fringe Benefits Tax

Fringe Benefits Tax (FBT) is a complex area when dealing with tax exempt organisations, such as schools.

In particular, entertainment can be a challenging area to work with as:

• the minor and infrequent benefits exemption is not available to tax exempt organisations; and
• the on-premises exemption is not available to tax exempt organisations.

Most organisations have documented policies and procedures in place for internal use that provides guidance on what constitutes entertainment for FBT purposes. ShineWing Australia’s employment tax team has assisted many tax exempt organisations including education institutions with preparation and implementation of internal policies and procedures on FBT.

A ‘FBT manual’ is an easy to access guide that:

• provides a general guidance on FBT benefits
• sets out the school’s position on FBT
• sets out whether the expenditure itself is allowable under the school’s policies (regardless of FBT)
• acts a repository of various forms and declarations.

Payroll tax and superannuation review

The introduction of single touch payroll means that the ATO have real-time visibility and transparency over the data organisations are reporting. The ATO are able to pick up on errors more easily and a similar level or internal controls are expected from employers.

Payroll tax audits and superannuation reviews are also rising due to single touch payroll. Various data sets lodged across sectors are being examined by the State Revenue Offices and any anomalies are flagged promptly. Payroll tax payments to contractors have always been a complex issue and a favourite one for ATO and State Revenue Offices. Data matching identifies contractor engagements and highlights impacted employers to tax authorities for further investigation.

ShineWing Australia’s data analytics capabilities will prove invaluable in situations like these to help quickly work through large amounts of data, including arrangements between principles and contractors. Our payroll tax experts can help to identify any potential risks that may cause an issue in a payroll tax audit.

GST governance

In a changing environment, it is more critical than ever to manage indirect taxes, with a focus on reducing risk and managing processes efficiently. In a digitalised environment, the increased prevalence of GST means keeping pace with the changes in GST rules can be difficult.

ShineWing Australia can provide expertise and processes that help to:

• reduce the risk of non-compliance
• reduce adverse impacts on cash-flow
• avoid penalties from tax authorities and large tax debts by identifying risks prior to any compliance activity by the ATO.

ShineWing Australia’s GST team has assisted many organisations with GST governance procedures including data analytics, policy and procedure review.

Get in touch

Do any of these matters affect you? Reach out to one of our experts below for more information on how to navigate these tax issues for your organisation.

The post Schools Tax Guide appeared first on SW Accountants & Advisors.

In-house tax, finance and accounting functions are increasingly using business data analytics insights to assist in managing their GST obligations.

Manage GST compliance risks

The Australian Taxation Office are increasingly taking an automated approach to tax audits using data analytical tests to identify errors and anomalies.

Running analytical tests on your GST data regularly, or prior to any ATO reviews has a number of potential benefits such as:

• Demonstrating good tax governance
• Identifying errors for voluntary disclosure to reduce the risk of potential penalties
• Draw attention to potential process deficiencies
• Identify potential overpayments or cash-flow opportunities
• Highlight potential anomalies which could otherwise trigger a GST audit

In order to focus on potential anomalies within large volumes of transactional data our data analytical tool assesses your data against a number of automated tests including:

• Do the Business activity Statements reconcile to the P&L?
• Are transaction reversals consistent with the original transaction posting?
• Is the GST treatment of a type of supply (goods or services) consistent?
• Is there a significant delay between transaction date and posting date?
• Are supply types and customer and transactions treated consistently for GST classification?
• Are there any potential duplicate transaction postings?
• Is GST being charged when it shouldn’t be?

It is also possible to use CTS GST data analytics to form part of your regular BAS preparation process.

Maximise GST opportunities

We also find in practice that using GST data analytics tools and methodologies often identifies areas of significant opportunity for GST savings. In many cases, this arises in circumstances where the correct GST treatment is known, but is not followed in practice. This is because our data analytics approach is focussed on how transactions have actually been treated in reality, instead of relying on how you think they should have or would have been treated.

Our GST data analytics approach has uncovered significant savings in areas such as the following:

• GST incorrectly charged and remitted on transactions within a GST group
• Import GST not fully captured and recovered
• Taxable purchases being incorrectly recorded as being GST free, meaning input tax credits were not identified and claimed
• GST input tax credits being missed where amounts have been ‘on-charged’ or reimbursed
• GST apportionment percentages not being appropriately followed or regularly reviewed
• Incorrect GST input tax credit calculations (eg GST not equal to 10%)
• GST on bad debts
• GST on journals
• Transactions not recorded through the usual sale and purchase process

Many clients have engaged us to undertake this analysis on a regular periodic basis, while some prefer to automate the analysis as part of their BAS preparation process. To download the CTS GST Data Analytics flyer, click here.

If you are interested in learning more about how we can assist you to maximise your GST opportunities while managing your GST risks, click here to join us at the upcoming CTS Conference in Melbourne or please email us at CTSteam@sw-au.com.

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