Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 7/10/2012

Australia - GST implications of incentive payments in supply chain 

July 10: The Administrative Appeals Tribunal of Australia issued its decision relating to the payment of certain incentives by manufacturers and distributors to automotive dealers. A.P. Group Limited v. Commissioner of Taxation (2 July 2012)

The decision:


  • Is referred to as "son of holdback" and follows an earlier decision in the Federal Court of Australia. KAP Motors Pty Ltd v. Commissioner of Taxation (2008)
  • Provides further explanation in characterising a supply and whether a payment has sufficient nexus to a supply (likely to be considered in the pending High Court of Australia decision in Quantas Airways Limited v. Commissioner of Taxation (2011)).

There can be on-going uncertainty as to how transaction are characterised, and specifically whether payments can be "for" or "in connection with" contractual rights and obligations and therefore any "supply" for GST purposes. Taxpayers must review their circumstances carefully (e.g., settlement payments, grants), paying close attention to the legal relationship.


Read a July 2012 report [PDF 98 KB] prepared by the KPMG member firm in Australia: Tax in Focus: Incentive payments to third parties in the supply chain – How various payments should be characterised for GST purposes?




©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to go-fmtaxnewsflash@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us