General Outline of instrument
This
instrument sets out the circumstances where a tax invoice is not required for a
particular entity to claim input tax credits under Division 29 of the A New
Tax System (Goods and Services Tax) Act 1999 (GST Act).
The proposed instrument is a
legislative instrument for the purposes of the Legislative Instruments Act
2003. It is made by, and is legally binding upon, the Commissioner of
Taxation.
Date of effect
This instrument applies from
1 October 2006.
What is this instrument about?
Under Division 29 of the GST
Act, a tax invoice is required in order to claim input tax credits for any
creditable acquisitions that an entity makes (unless the value of the taxable
supply is $50 or less).
This determination will
waive the tax invoice requirement for government law enforcement agencies who
reimburse work expenses incurred by their employees or agents working as
undercover officers under assumed names where, due to the nature of the officers'
duties, they are unable to obtain a tax invoice.
For the purposes of the determination,
a government law enforcement agency means a government related entity whose
responsibilities include law enforcement services for preventing criminal
behaviour.
What is the effect of this instrument?
The effect of this
instrument is that government law enforcement agencies that employ undercover
officers who perform duties under assumed names for the purposes of law
enforcement will have a clear understanding of the requirements to claim any
legally entitled input tax credits for creditable acquisitions made on their
behalf.
Background
Undercover officers as employees
or agents of government law enforcement agencies using assumed identities often
incur expenses as part of their duties that are reimbursed by their employer.
However, due to the nature of the undercover officer’s work, they may not
always be able to obtain a tax invoice.
This determination recognises
the special difficulties government law enforcement agencies face in complying
with GST tax invoice requirements. This determination avoids the need to make a
GST administrative determination exercising the Commissioner’s discretion for each
creditable acquisition that an undercover officer makes.
Consultation
This determination arose
from representations made by state government treasury officials. Those
officials outlined the difficulties faced by law enforcement agencies in
complying with tax invoice requirements. They were extremely supportive of the
determination. In subsequent discussions, state government treasury officials reiterated
their support.
Extensive consultation was
undertaken with all the business and service lines of the Tax Office. None of
them could foresee any adverse consequences for their operations from the issue
of the determination.
Legislative
references:
A New
Tax System (Goods and Services Tax) Act 1999