Australia

Details

  • Service: Tax, Indirect Tax, Topics, Base Erosion and Profit Shifting
  • Type: Regulatory update
  • Date: 19/12/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Alison Marshall

Alison Marshall
Director, Tax

+61 2 9335 7386

armarshall@kpmg.com.au

Don’t forget the 10 percent 

by Alison Marshall, Indirect Tax Specialist

Discussion to date on the current Base Erosion and Profit Shifting (BEPS) activity and the Australian Taxation Office (ATO) international structuring and profit shifting (ISAPS) field review program has largely focused on income tax and transfer pricing. 

You may be tempted, in the spirit of being a good corporate citizen, to voluntarily provide information to the ATO. Before doing so, you should carefully consider the broader implications, including goods and services tax (GST). 

 

Generally for global businesses, the threshold for GST registration is often lower than the income tax permanent establishment threshold. For example, a non-resident entity may find it has Australian GST obligations by simply engaging an Australian subcontractor (whether related or otherwise) to provide services to its Australian client.

 

Clearly caution should be exercised in providing information in relation to global business operations and the supply chain, because if not fully considered, the response may cause the ATO to query whether offshore members of the corporate group have Australian GST obligations.

 

In responding to E-commerce questions, it is wise to contemplate the GST implications as, for example, the use of a server in Australia to perform last mile delivery could be sufficient to make a supply connected with Australia.

 

Finally, the Commissioner’s position on GST in relation to a number of areas of e-commerce is as yet unclear, so be mindful of the potential GST implications in how you respond.

 

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