A New Tax System (Goods and Services Tax) Regulations 2019

Chapter 4 - The special rules

Part 4-2 - Special rules mainly about supplies and acquisitions

Division 70 - Financial supplies (reduced credit acquisitions)

SECTION 70-5.02 Acquisitions that attract reduced input tax credits: general

(1)

For the purposes of subsection 70-5(1) of the Act, an acquisition mentioned in the following table that relates to making financial supplies can give rise to an entitlement to a reduced input tax credit.

Reduced credit acquisitions - general
Item	Acquisition
Transaction banking and cash management services
1	The service of opening, issuing, closing, operating, maintaining or performing a transaction in respect of an account by a financial supply facilitator, including by using the following facilities: (a) telephone banking; (b) internet banking; (c) Bank@Post
2	Processing services in relation to account information for account providers, including the following: (a) archives storage, retrieval and destruction services; (b) statement processing and bulk mailing; (c) processing and manipulation of information relating to accounts, including information about transactions to which item 7 applies
3	Acquisition of transaction cards by card account providers
4	Acquisition of passbooks, deposit and withdrawal forms and cheques and chequebooks by account providers
5	Processing services in relation to account applications for account providers, including providing credit reference and credit scoring assessments
Payment and fund transfers services
6	Supplies to which the following payment system fees relate: (a) fees charged by the operator of a payment system to a participant in the system; (b) fees charged by a participant in a payment system to a third party in relation to access to the system; (c) fees charged between participants in a payment system
7	Processing, settling, clearing and switching transactions of the following kinds: (a) direct credit and debit; (b) other credit and debit transactions; (c) charge, credit and debit card transactions; (d) cheque; (e) electronic funds transfer; (f) ATM; (g) BPAY; (h) internet banking; (i) Bank@Post; (j) the SWIFT (Society for Worldwide Interbank Financial Telecommunications) Payment Delivery System
8	Services to a third party mentioned in paragraph (b) in item 6, including: (a) processing of account data; and (b) electronic payment services
Securities transactions services
9	Arrangement, by a financial supply facilitator, of the provision, acquisition (within the meaning of Division 40) or disposal of an interest in a security, including the following: (a) order placement and trade execution; (b) clearance and settlement of trades; (c) management of the issue of securities, including rights and bonus issues; (d) arranging flotations and privatisations; (e) arranging mergers and acquisitions; (f) arranging takeover bids; (g) performing a settlement, including issue of drafts and encashment; (h) other securities transactions, including lodgement, withdrawal and exchange control; (i) underwriting, except a matter that is described in the table in subsection 40-5.09(3)
10	Securities and unit registry services to securities and unit issuers, including the following: (a) managing portfolios of assets; (b) allotting of share issues; (c) making dividend payments; (d) receiving applications for issue of shares; (e) performing a redemption or capital repayment; (f) placing scrip orders; (g) bonus issues; (h) scrip settlement; (i) client account processing; (j) transaction processing and recording; (k) handling investor inquiries
Loans services
11	The following supplies by a financial supply facilitator: (a) loan agency services; (b) provision of a loan facility; (c) mortgage broking; (d) arranging syndicated loans; (e) introducing and broking
12	Lenders mortgage and title insurance
12A	Lenders mortgage reinsurance
13	Loan protection insurance
14	The following loan application, management and processing services: (a) loan origination and brokerage; (b) settlement and discharge of loans, including document preparation; (c) registration of loan documents; (d) credit reference assessment and credit scoring analysis; (e) valuations; (f) property title searches; (g) registration and certification of titles; (h) mortgage variations, including name changes; (i) lodging and removing caveats to titles
15	The following loan management services: (a) processing of repayments; (b) statement preparation; (c) filing and requisitioning of loan file records
Credit union services
16	Supply to a credit union by: (a) an entity that is wholly owned by 2 or more credit unions; or (b) an entity that is wholly owned by an entity mentioned in paragraph (a)
Debt collection services
17	The following debt collection services: (a) debt recovery; (b) litigation; (c) lodgement of documents; (d) management by a financial supply facilitator of the recovery of sums due by borrowers
Asset based finance services
18	Arrangement by a financial supply facilitator of hire purchase to which item 8 in the table in subsection 40-5.09(3) applies
Trade finance services
19	Trade finance transaction processing and recording
20	Trade finance remittance services
Capital markets and financial instruments services
21	Arrangement by a financial supply facilitator of any of the following: (a) the supply of a derivative or foreign currency, or an agreement to buy or sell foreign currency; (b) the sale of a forward contract; (c) the supply of digital currency, or an agreement to buy or sell digital currency
22	Transaction processing, account maintenance and report generation services provided to any of the following: (a) suppliers of derivatives; (b) suppliers of foreign currency, or an agreement to buy or sell foreign currency; (c) suppliers of digital currency, or an agreement to buy or sell digital currency
Funds management services
23	The following investment portfolio management functions, including those functions for superannuation schemes: (a) management of a client ' s asset portfolio; (b) management of an investment portfolio for a trust or superannuation fund; (c) acting as a trustee of a trust or superannuation fund; (d) acting as a single responsible entity; (e) asset allocation services
24	The following administrative functions in relation to investment funds, including those functions for superannuation schemes: (a) maintaining member and employer and trustee records and associated accounting; (b) processing of applications, contributions, benefits and distributions; (c) processing transfers between funds and trusts; (d) production of reports, statements and forms and distribution to members, employers and trustees; (e) handling of inquiries and complaints made by members; (f) archives storage, retrieval and destruction services; (g) statement processing and bulk mailing; (h) compliance with industry regulatory requirements, excluding taxation and auditing services; (i) processing and assessing claims under life insurance policies
Insurance services
25	Brokerage of general or life insurance
26	The following life insurance administration services provided for a life insurer: (a) maintaining policyholder records and associated accounting; (b) processing of premiums and benefits; (c) processing and assessing claims under policies; (d) production of reports, statements and forms and distribution to policyholders, including statement processing and bulk handling; (e) handling of inquiries and complaints made by policyholders; (f) archives storage, retrieval and destruction services; (g) processing and assessing applications; (h) compliance with industry regulatory requirements, excluding taxation and auditing services; (i) managing reinsurance requirements
Services remunerated by commission and franchise fees
27	Supplies for which financial supply facilitators are paid commission by financial supply providers
28	Supplies provided by financial supply facilitators to franchisors, for which the facilitators are paid a franchise fee
Trustee and custodial services
29	Trustee and custodial services (except safe custody of money, documents and other things), including the following: (a) transfer of cash without purchase, sale or transfer of assets, excluding cash delivery and collection from branches of Australian ADIs; (b) undertaking and settling of securities transactions by a financial supply facilitator; (c) collecting income and other payments; (d) registration of interests and rights; (e) proxy voting; (f) exercise of options and warrants; (g) opening and maintaining accounts with Australian ADIs; (h) nominee services in relation to financial supplies
30	The following master custody services: (a) maintenance of accounting records; (b) taxation reporting; (c) mandate monitoring; (d) trade execution monitoring; (e) portfolio performance analysis; (f) risk management reporting
31	Single responsible entity services
Supplies to recognised trust schemes
32	Supplies acquired by a recognised trust scheme, to the extent that: (a) the supplies are acquired on or after 1 July 2012; and (b) the supplies acquired are not:
		(i) a supply by way of sale of goods, or a supply of real property, made by selling a freehold interest in land, selling a stratum unit or granting or selling a long-term lease; or (ii) a brokerage service covered by item 9 or 21; or (iii) a service covered by paragraph (a), (b) or (e) of item 23; or (iv) a service covered by paragraph (a), (b), (c), (d), (e), (f), (g) or (i) of item 24; or (v) a custodial service covered by item 29; or (vi) a master custody service covered by item 30; or (vii) a monitoring or reporting service covered by item 33
Monitoring services
33	Monitoring and reporting services (other than taxation and auditing services) that: (a) are acquired on or after 1 July 2012; and (b) are required for compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Note:

These are reduced credit acquisitions: see subsection 70-5(1) of the Act.

(2)
However, something that is used in making a reduced credit acquisition is not, for that reason, a reduced credit acquisition.

Example 1:

Information technology services used for brokerage services.

Example 2:

Labour hire services used for life insurance administration services.

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