Tax Laws Amendment (2010 GST Administration Measures No. 2) Act 2010 (74 of 2010)

Schedule 1   GST groups and GST joint ventures

Part 2   Indirect tax sharing agreements

Taxation Administration Act 1953

61   After subsection 444-90(1) in Schedule 1

Insert:

Indirect tax sharing agreements

(1A) Despite subsection (1), if:

(a) before the *representative member of the group is required to give to the Commissioner a *GST return for a *tax period, an agreement (the indirect tax sharing agreement ) has been entered into between:

(i) the representative member; and

(ii) one or more other *members of the group (the contributing member ); and

(b) a particular amount (the contribution amount ) could be determined under the indirect tax sharing agreement for each contributing member in relation to that tax period; and

(c) the contribution amounts for each of the contributing members under the indirect tax sharing agreement represent a reasonable allocation among:

(i) the representative member; and

(ii) the contributing members;

of the total amount payable, under *indirect tax laws, for which the members of the group would be jointly or severally liable under subsection (1) in relation to that tax period;

then:

(d) if the contributing member leaves the group before the representative member of the group is required to give to the Commissioner a GST return for that tax period, and subsection (1B) applies - the contributing member is not liable under subsection (1) in relation to an indirect tax amount relating to that tax period; or

(e) otherwise - the contributing member's liability under subsection (1) in relation to that tax period is not to exceed that contribution amount.

(1B) This subsection applies if:

(a) leaving the group was not part of an arrangement, a purpose of which was to prejudice the recovery by the Commissioner of the indirect tax amount; and

(b) before the day on which the *representative member is required to give to the Commissioner a *GST return for that tax period, the contributing member pays to the representative member:

(i) the contribution amount relating to that tax period; or

(ii) if the contribution amount cannot be determined at the time of the payment - an amount that is a reasonable estimate of the contribution amount.

(1C) Subsection (1A) does not apply if:

(a) the indirect tax sharing agreement was entered into as part of an arrangement; and

(b) a purpose of the arrangement was to prejudice the recovery by the Commissioner of the indirect tax amount.

(1D) Subsection (1A) does not apply if:

(a) the Commissioner gives the *representative member of the group written notice under this subsection in relation to the indirect tax sharing agreement (whether before, when or after an indirect tax amount to which the agreement relates becomes payable); and

(b) the notice requires the representative member to give the Commissioner a copy of the agreement in the *approved form within 14 days after the notice is given; and

(c) the Commissioner does not receive a copy of the agreement by the time required.

(1E) Subsection (1A) does not apply if, apart from this subsection, the requirements of subsection (1A) would be satisfied in relation to 2 or more agreements:

(a) that were entered into by the *representative member; and

(b) that relate to the same tax period.

Effect of prohibitions on certain arrangements