• Service: Tax, Corporate Tax
  • Industry: Retail
  • Type: Regulatory update
  • Date: 27/06/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Michael Charles

Michael Charles
Director, Tax

+61 3 9288 6671

Don’t forget the local shop! — Tax advice up front 

by Michael Charles, Corporate Tax Specialist

We hear a lot about internet retail and how it is changing customer-retailer relationships, but we tend to overlook the innovative ways retailers in physical space (i.e. shops and shopping centres) seek to refresh their engagement with their customers and suppliers. Given the tightness of retail margins and the toughness of competition, the tax analysis may come way down the back when the tax return is being prepared, rather than at the formulation or implementation of the proposal, be it a trade discount or customer incentive.

Generally, being business as usual arrangements, there are no negative impacts when everything is settled down. However, when the proposition is big, it pays to consult your advisor on how our complex tax laws, be they goods and services tax (GST) or income tax, may apply to your idea.


Recently we considered a straight forward customer voucher arrangement where the customer will be able to claim a discount on future purchases, based on the amount of current purchase. The questions concerned how and when the retailer would treat the discount. As to be expected, arriving at the destination is all the more satisfying when the journey has thrown up a few obstacles. In this case, we considered GST, and income tax, and worked out the essential tax nature of the proposed arrangement. At KPMG we have significant experience in all aspects of retail and are happy to talk to you when you need that input.


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