How Different is the Australian GST Really?

The VAT / GST seminar - Input tax deductibility and neutrality

Professor Rebecca Millar* 3 August 2016

*Sydney Law School

  Download PPTX - 411 kbText version of PowerPoint presentation

A New Tax System (Goods and Services Tax) Act 1999

s.11-15(1):

You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise.

  • See also s.15-10(1) and s.129-50(1)

Rompelman

[T]he deduction system is meant to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities.

HP Mercantile Pty Limited v FCT [2005] FCAFC 126

Tax diagram of HP Mercantile Pty Limited v FCT [2005] FCAFC 126

FCT v Department of Transport (Victoria) [2010] FCAFC 84

Tax diagram of FCT v Department of Transport (Victoria) [2010] FCAFC 84

Nexus between inputs and outputs
Sveda

Tax diagram of Nexus between inputs and outputs Sveda

Nexus between inputs and outputs
Sveda

Tax diagram of Nexus between inputs and outputs Sveda

Nexus between inputs and outputs
Sveda

Is the Court looking through the direct connection with the out-of-scope supplies to the connection with taxed supplies because the free access was a condition of the subsidy? Because it was a way of attracting customers to its taxable supplies (like free parking at a supermarket)?  Because eventually Sveda would be able to charge for access and in the meantime it would make other taxable supplies?

Nexus between inputs and outputs
Rio Tinto

Tax diagram of Nexus between inputs and outputs Rio Tinto

Nexus between inputs and outputs
Rio Tinto

Tax diagraom of Nexus between inputs and outputs Rio Tinto

Nexus between inputs and outputs
Rio Tinto

Tax diagram of Nexus between inputs and outputs Rio Tinto

Polski Trawertyn

22 Dec Two ‘partners’ acquire (enter into an agreement to acquire?) a stone quarry

 Receive invoice issued in their names

27 April Partnership ‘founded’

 Notary invoices for drawing up partnership agreement

 Stone quarry contributed as an in-kind contribution

5 June Partnership registered on the companies register

How would Australian GST apply to these transactions?

Publications

Rebecca Millar “Limitations on the right to credit input tax Rio Tinto Services Limited v Commissioner of Taxation [2015] FCAFC 117” (2016) 5 World Journal of VAT/GST Law 42-47: Rio Tinto, Sveda http://ssrn.com/abstract=2772375

Rebecca Millar “Grappling with basic VAT concepts in the Australian GST: the meaning of ‘supply for consideration’” (2014) 3 World Journal of VAT/GST Law 1-31: TT Line, Department of Transport (Victoria) http://ssrn.com/abstract=2591231

Rebecca Millar “Taxable Amount: Fiscal Neutrality in Action” in Lang et al ECJ - Recent Developments in Value Added Tax: The Evolution of European VAT Jurisprudence and its Role in the EU Common VAT System (2014, Linde Verlag, Vienna), pp. 223-245: American Express Wholesale Currency Services

Rebecca Millar “What’s VAT got to do with it?” (2012) 12 Australian GST Journal, 99-124: Rompelman, INZO, Ghent Coal, HP Mercantile