Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (NO. 8) 2000 NO. 156, 2000 - SCHEDULE 3

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

1 Section 11-99 (table item 3A)

3A

Fringe benefits provided by input taxed suppliers

Division 71

2 Section 15-99 (table item 1A)

1A

Fringe benefits provided by input taxed suppliers

Division 71

3 Section 17-99 (after table item 9)

9AA

Non-deductible expenses

Division 69

4 Section 19-99 (after table item 1)

2

Non-deductible expenses

Division 69

5 Section 29-39 (after table item 8A)

8B

Non-deductible expenses

Division 69

6 Section 37-1 (table item 10B)

7 Section 37-1 (after table item 11)

11A

Fringe benefits provided by input taxed suppliers

Division 71

8 After section 69-1

9 After subsection 69-5(3)

(3A)

An acquisition or importation is also a non-deductible expense to the extent that it is not deductible under Division 8 of the ^* ITAA 1997 because of one of the following:

(a)

section 51AEA of the ^* ITAA 1936 (Meal entertainment—election to use the 50/50 split method);

(b)

section 51AEB of the ITAA 1936 (Meal entertainment—election to use the 12 week register method);

(c)

section 51AEC of the ITAA 1936 (Entertainment facility—election to use the 50/50 split method).

9A Subsection 69-5(4)

10 At the end of Division 69

Subdivision 69-B—Elections for GST purposes relating to meal entertainment and entertainment facilities
69-15 What this Subdivision is about

The GST consequences of incurring certain expenses for the provision of meal entertainment and entertainment facilities depend on elections made under fringe benefits tax law. These elections might not be made until after GST returns are due.
This Subdivision allows elections to be made for GST purposes so that GST returns can take into account the likely application of subsection 69-5(3A) to those expenses, before the fringe benefits tax elections are made.

69-20 Effect of elections on net amounts

(1)

If you make an election under this Subdivision that has effect during a particular tax period, your ^* net amount for the tax period must be worked out on the basis of that election.

(2)

This section has effect despite section 17-5 (which is about working out your net amount).

69-25 Election to use the 50/50 split method for meal entertainment

You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as ^* non-deductible expenses because of paragraph 69-5(3A)(a), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if:

(a)

an election were in force under section 37AA of the Fringe Benefits Tax Assessment Act 1986 (but no further election were in force under section 37CA of that Act); and

(b)

section 51AEA of the ^* ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations.

69-30 Election to use the 12 week register method for meal entertainment

(1)

You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as ^* non-deductible expenses because of paragraph 69-5(3A)(b), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if:

(a)

an election were in force under section 37CA of the Fringe Benefits Tax Assessment Act 1986 ; and

(b)

section 51AEB of the ^* ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations.

(2)

However, you cannot make the election unless you have a ^* valid meal entertainment register.

69-35 Election to use the 50/50 split method for entertainment facilities

You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as ^* non-deductible expenses because of paragraph 69-5(3A)(c), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if:

(a)

an election were in force under section 152B of the Fringe Benefits Tax Assessment Act 1986 ; and

(b)

section 51AEC of the ^* ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations.

69-40 When elections take effect

(1)

An election under this Subdivision is taken to have effect, or to have had effect, from the start of the tax period specified in the election.

(2)

The tax period may be a future tax period or the current tax period. It cannot be a tax period that has already come to an end.

69-45 When elections cease to have effect

If a circumstance specified in the second column of the following table occurs, the election ceases to have effect from the start of the tax period specified in the third column:

69-50 Adjustment events relating to elections

(1)

The following are adjustment events if they have the effect of changing the extent to which an acquisition you made is a ^* creditable acquisition:

(a)

an election you make under this Subdivision ceases to have effect at a time other than the start of an ^* FBT year;

(b)

an election is made under section 37AA, 37CA or 152B of the Fringe Benefits Tax Assessment Act 1986 for an FBT year, without one or more corresponding elections under this Subdivision having been made covering all the tax periods in that year;

(c)

an election is not made under section 37AA, 37CA or 152B of that Act for an FBT year, but one or more corresponding elections have been made under this Subdivision covering one or more of the tax periods in that year.

(2)

However, an ^* adjustment event under this section arises only in respect of a tax period in which:

(a)

the day occurs by which you are required, under section 68 of the Fringe Benefits Tax Assessment Act 1986 , to furnish a return to the Commissioner relating to an ^* FBT year; or

(b)

if you are not required under that section to lodge a return relating to that FBT year—the day occurs by which you would have been required under that section to lodge a return relating to that FBT year, if you were required to lodge the return.

(3)

Subdivision 19-C applies to the acquisition in question as if every ^* adjustment event under this section that occurred during the ^* FBT year, and that relates to the acquisition, occurred during the tax period referred to in paragraph 19-70(a).

(4)

This table sets out when elections that you make or fail to make under section 37AA, 37CA or 152B of the Fringe Benefits Tax Assessment Act 1986 correspond to elections under this Subdivision:

69-55 Adjustment notes not required

Subsection 29-20(3) does not apply to a ^* decreasing adjustment arising from an ^* adjustment event of a kind referred to in section 69-50.

11 Division 71 (heading)

Division 71—Fringe benefits provided by input taxed suppliers
12 Section 71-1

13 Section 71-5 (heading)

71-5 Acquisitions by input taxed suppliers to provide fringe benefits
14 Subsections 71-5(1) and (2)

(1)

An acquisition that solely or partly relates to making supplies that are ^* input taxed is not a ^* creditable acquisition if:

(a)

the acquisition would (but for this section) be an acquisition of a kind referred to in paragraph 149A(2)(b) of the Fringe Benefits Tax Assessment Act 1986 ; and

(b)

the acquisition specifically relates to the provision of a particular benefit (within the meaning of that Act) in respect of which ^* fringe benefits tax is or will be payable.

(2)

However, this section does not apply to an acquisition if:

(a)

the only reason it relates to making supplies that are ^* input taxed is because it relates to making ^* financial supplies; and

(b)

you do not ^* exceed the financial acquisitions threshold.

15 Section 71-10 (heading)

71-10 Importations by input taxed suppliers to provide fringe benefits
16 Subsections 71-10(1) and (2)

(1)

An importation that solely or partly relates to making supplies that are ^* input taxed is not a ^* creditable importation if:

(a)

the importation would (but for this section) be an importation of a kind referred to in paragraph 149A(2)(b) of the Fringe Benefits Tax Assessment Act 1986 ; and

(b)

the importation specifically relates to the provision of a particular benefit (within the meaning of that Act) in respect of which ^* fringe benefits tax is or will be payable.

(2)

However, this section does not apply to an importation if:

(a)

the only reason it relates to making supplies that are ^* input taxed is because it relates to making ^* financial supplies; and

(b)

you do not ^* exceed the financial acquisitions threshold.

17 Section 111-1

18 Subsection 111-5(1)

19 Paragraph 111-5(1)(a)

20 After paragraph 111-5(1)(a)

(ab)

you reimburse an employee (whether or not you are the employee's employer) for an expense that the employee or the employee's ^* associate incurs, and the reimbursement constitutes an ^* expense payment benefit;

(ac)

you reimburse an associate of an employee (whether or not you are the employee's employer) for an expense that the associate or employee incurs, and the reimbursement constitutes an expense payment benefit;

21 Paragraph 111-5(1)(b)

22 Subsection 111-5(1)

23 Paragraph 111-5(3)(a)

(a)

is not a ^* creditable acquisition to the extent (if any) that:

(i)

the employee, ^* associate, agent, ^* officer or partner is entitled to an input tax credit for acquiring the thing acquired in incurring the expense; or

(ii)

the acquisition would not, because of Division 69, be a creditable acquisition if you made it; and

24 Paragraph 111-5(3)(b)

25 At the end of subsection 111-5(3)

; and (c) is not a creditable acquisition if you would, because of Division 71, not have been entitled to an input tax credit if you had made the acquisition that the employee, associate, agent, officer or partner made.

26 Subsection 111-10(2)

(2)

However, if:

(a)

the person incurring the expense incurs it in the capacity of an agent, ^* officer or partner; and

(b)

the incurring of the expense is only in part related directly to his or her activities as your agent or officer, or as a partner, as the case requires;