Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

I present a supplementary explanatory memorandum to the bill, and I move the government amendment as circulated:

(1) Schedule 2, Part 2, page 10 (after line 14), at the end of the Part, add:

3 General exemptions

(1) As from the commencement of this Schedule, the Commissioner is taken to have determined, under subsection 396-70(4) in Schedule 1 to the Taxation Administration Act 1953, the matters in subitems (2) and (3).

Exemption in relation to cleaning services

(2) Where the amended provision requires an entity to prepare and give a report for a transaction that is described in item 11 of the table in that provision and that happens during a particular period (the reporting period), the entity is not so required if:

(a) the total value of the consideration that:

  (i) is received by the entity during the reporting period; and

  (ii) relates to the supply by the entity, including by a contractor or subcontractor on behalf of the entity, of a cleaning service;

is less than 10% of the entity's relevant GST turnover as at the end of the reporting period; and

(b) the transaction is not described in another item of the table in the amended provision; and

(c) the entity has not, before the time by which the amended provision requires the report to be given, or within such further time allowed by the Commissioner, chosen to be required to prepare and give a report for the transaction.

Exemption in relation to courier services

(3) Where the amended provision requires an entity to prepare and give a report for a transaction that is described in item 12 of the table in that provision and that happens during a particular period (the reporting period), the entity is not so required if:

(a) the total value of the consideration that:

  (i) is received by the entity during the reporting period; and

  (ii) relates to the supply by the entity, including by a contractor or subcontractor on behalf of the entity, of a courier service;

is less than 10% of the entity's relevant GST turnover as at the end of the reporting period; and

(b) the transaction is not described in another item of the table in the amended provision; and

(c) the entity has not, before the time by which the amended provision requires the report to be given, or within such further time allowed by the Commissioner, chosen to be required to prepare and give a report for the transaction.

Determination not a legislative instrument

(4) The determination under subitem (1) is not a legislative instrument.

Repeal or amendment of determination

(5) The Commissioner may, by legislative instrument under subsection 396-70(4) in Schedule 1 to the Taxation Administration Act 1953, repeal or amend the determination as if the Commissioner had made it by legislative instrument under subsection 396-70(4).

Note: See subsection 33(3) of the Acts Interpretation Act 1901. The legislative instrument would provide that the determination under subitem (1) is repealed or amended.

(6) For paragraphs (2) (c) and (3) (c), giving a report for the transaction is sufficient evidence of the making of the choice.

Definitions

(7) In this item:

amended provision means section 396-55 in Schedule 1 to the Taxation Administration Act 1953, as amended by item 1 of this Schedule.

relevant GST turnover, as at the end of a reporting period, means:

(a) if the entity has been making supplies for at least 12 months—the entity's current GST turnover as at the end of the reporting period; or

(b) otherwise—the entity's projected GST turnover, within the meaning of the A New Tax System (Goods and Services Tax) Act 1999, as at the end of the reporting period.

[general exemptions]

The parliamentary amendment removes a mechanism to remove reporting obligations for businesses that provide courier or cleaning services where those services are merely a small part of the overall activity of the business. Following the introduction of the bill to parliament on 7 February 2018, additional stakeholder consultation was undertaken to address concerns that businesses providing a small portion of courier or cleaning services may have a disproportionate compliance burden. Stakeholders were supportive of the introduction of a threshold test based on GST turnover to exempt certain businesses from the reporting requirements. The threshold test will create an exemption for those businesses that receive payments for courier or cleaning services totalling less than 10 per cent of the business's overall GST turnover. If a business satisfies this test, they will be exempt from reporting the payments to the ATO that they make to contractors they engage to complete these services.

The Commissioner of Taxation may, through legislative instrument, amend or alter the threshold test in response to a change in risks and compliance burden identified in the courier and cleaning industries. Given that legislative instruments are disallowable by either house of parliament, any proposed change to the threshold test by the commissioner will be subject to parliamentary scrutiny. The introduction of the threshold test will not have a material impact on the costings as published in the explanatory memorandum to the bill. The ATO will publish guidance material on its website to assist businesses providing cleaning or courier services to determine when they need to report.

The government announced a further expansion to the taxable payments reporting system in the 2018-19 budget to the following new industries: security providers and investigation services, road freight transport services, and computer systems design and related services. Application of the threshold test for these new industries will be considered during the development of the legislation for the measure.

Question agreed to.

Bill, as amended, agreed to.