October 2016 GST Import Issues - ftalliance.com.au · GST | October 2016 The Law Change Tax and...

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Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149

Tax Conference | 2014


Presented by:

Wai Choong Chan | Associate Partner – Tax Advisory

October 2016

GST Import Issues



Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


Disclaimer

This presentation is for general information only. Any advice in it has been prepared without taking

into account your personal circumstances. You should seek professional advice before acting on

any material.

Liability limited by a scheme approved under Professional Standards Legislation other than for the

acts or omissions of financial services licensees.

While all reasonable care is taken in the preparation of this presentation, to the extent allowed by

legislation Crowe Horwath (Aust) Ltd accepts no liability whatsoever for reliance on it.

All opinions, conclusions, forecasts or recommendations are reasonably held at the time of

compilation but are subject to change without notice by Crowe Horwath (Aust) Ltd.

Crowe Horwath (Aust) Ltd assumes no obligation to update this presentation after it has been

issued.

Crowe Horwath (Aust) Ltd is a member of Crowe Horwath International, a Swiss verein. Each

member firm of Crowe Horwath is a separate and independent legal entity. Crowe Horwath (Aust)

Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or

any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability

for acts or omissions of Crowe Horwath or any other Crowe Horwath member. Crowe Horwath

(Aust) Ltd ABN 84 006 466 351.

GST Import Issues| October 2016



Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


Agenda - GST import issues

1. VoTI and DIBPN 2016/33

2. Non Residents importing goods into Australia and claiming back GST

3. GST implications of DDP transactions

4. $1000 Low Value Threshhold and GST

5. Questions

GST | October 2016 GST Import Issues| October 2016



Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

VoTI (Value of taxable importation)

The value on which GST is applied for taxable importations is the VoTI.

It comprises:

a) Customs value (typically FOB value)

b) Freight and insurance costs to their place of consignment in Australia

c) Loading, handling or facilitation costs during the international transport, to

the extent not already included above

d) Customs duty

e) WET or LCT

Current practice for freight and insurance, if not known, is to use an estimate or

approved “safe harbour” per guidance from DIBP in ACN 2005/23 and ACN

1990/71




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

The Law Change

Tax and Superannuation Laws Amendment (2016 Measures No.1) Act 2016

An amendment to the GST Act, intended to reduce compliance costs for GST

registered importers

When calculating VoTI for GST purposes*:

no longer required to identify exact transport, insurance and loading, handling

etc. costs

instead, may choose to use 10% safe-harbour (or other percentage as

prescribed by regulations)

* does not apply to importations of wine or of luxury cars




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

DIBP Notice 2016/33

Revokes ACN 2005/23 and ACN 1990/71

Discusses transport and insurance component for calculation of

1. Customs value, for customs duty purposes

2. VoTI, for GST purposes




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

To determine Customs Value:

1. If T&I is known, use actual.

2. If T&I is unknown but is included in

contract value (e.g. CIF, CFR contracts):

• exclude T&I using a “soundly based”

estimate that “closely approximates” the

actual T&I; and

• if incorrect to a “material extent” need to

amend import declaration

To determine VoTI:

1. If T&I is known, use actual

2. If T&I is unknown but is included in contract

value (e.g. CIF, CFR contracts):

• declare T&I using a “soundly based” estimate

that “closely approximates” the actual T&I; or

• declare T&I using 10% of customs value;

and

• if incorrect to a “material extent”, NO NEED

to amend import declaration if use 10%

3. If T&I is unknown and not already included

in contract value (e.g. FOB contracts):

• include T&I using “sound estimate”; or

• include T&I using 10% of customs value; and

• if incorrect to a “material extent”, NO NEED

to amend import declaration if use 10% [ only for GST registered importers ]




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

WHAT NEXT?

For GST, the matter is not significant because of the availability (generally) of a

GST credit / input tax credit

But for Customs purposes,

Confusion / uncertainty on revocation of previous guidance

Significant and unexpected compliance concerns

Backlash has taken DIBP by surprise

Further DIBP communication to come




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


2. Non Residents importing goods into Australia




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

GST law – s13 Taxable importations

General rule:

You make a taxable importation if

Goods are imported; and

You enter the goods for home consumption




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

GST law – s13 Taxable importations

ATO view*:

The definition of “owner”**

Thus a non-resident, or any agent of a non-resident, who is

nominated as the “owner” on the import declaration is liable for

paying the GST on the importation

* GST Ruling GSTR 2003/15

** Customs Act 1901 section 4

the person indicated as the “owner” on the

import declaration is the entity that imports the

goods, and is liable for the GST

is wide, and can include the overseas seller, the

Australian buyer, any agent thereof and the

customs broker




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

GST law – s15 Creditable importations – claiming the GST back

You are entitled to the input tax credit for any creditable importation

that you make

You make a creditable importation if

you import goods solely or partly for a creditable purpose;

the importation is a taxable importation; and

you are registered or required to be registered

Note: The above applies irrespective of whether the GST Deferral

scheme is in place




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016





Two conditions:

1. You cause the goods to be brought to

Australia for your own purposes;

and

2. You complete the customs

formalities, i.e. you (or your agent)

are named as the “owner” on the

import declaration

Two limbs:

1. You import goods in carrying on your

enterprise;

but

2. Not to the extent that the importation is:

a) is private or domestic; or

b) relates to making input taxed supplies

(such as financial services or

residential rent)




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016


Seller

Buyer /

Consignee

sale

Two conditions:

1. You cause the goods

to be brought to

Australia for your own

purposes; and

2. You complete the

customs formalities,

i.e. you (or your agent)

are named as the

“owner” on the import

declaration

Own purposes:

• use in your business

• resale by you

• retention in your business

• other application by you

Does not include

• Transporting

• Third party logistics

Customs Broker

ATO warning:

“Where an entity, other than the

entity that causes the goods to be

brought to Australia, makes the

taxable importation by attending

to the customs formalities in its

own right, neither entity makes a

creditable importation”

Freight Forwarder




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016








Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016





Issues

1. GST registration of a non-resident

2. Australian bank account to receive GST refund

3. Any other obligations as a result of GST registration




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149






Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149




Delivered Duty Paid (DDP)

ICC Incoterms 2010:

“Delivered duty paid means that the seller delivers the goods to the

buyer, cleared for import, and not unloaded from any arriving means of

transport at the named place of destination.

The seller has to bear all the costs and risks involved in bringing the

goods thereto including, where applicable, any duty (which term

includes the responsibility for and the risk of the carrying out of

customs formalities and the payment of formalities, customs duties,

taxes and other charges) for import in the country of destination.”



Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

Double GST for DDP

For GST purposes, there is both a taxable importation as well as a taxable supply

Under GST law, if the supplier imports the goods into Australia, then s9-25(3)

makes the supply connected with Australia and therefore prima facie taxable.

Overseas seller has to pay GST on the importation AND on the sale

technically, should be neutral; but difficult to achieve practically

sometimes a “GST reverse charge” agreement is used but only solves part

of the problem

requirement to issue tax invoice?

commercially, price may be fixed resulting in GST leakage / GST clause?




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

Australian Customs and Border Protection Notice 2014/50

Notes that usually the overseas seller is importer in DDP contracts

Provides warning re Customs:

Despite not being not named as “owner” on the import declaration,

the Australian buyer may be pursued for:

Commercial documents

Duty short paid and GST

Repeats warning re GST:

Where one entity causes the goods to be brought to Australia and

another entity makes the taxable importation, neither entity is entitled

to claim the input tax credit.




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


4. Low Value Threshhold (<$1000) and GST




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

Recall taxable importations…

General rule:



You enter the goods for home

consumption

Exceptions:

Non-taxable importations

Importations of money




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



GST | October 2016

Recall taxable importations…

General rule:



You enter the goods for home

consumption

Exceptions:

Non-taxable importations

Importations of money

GST exempt imports:

e.g.

• Food*

• Medical aids and

appliances*

Customs Tariff Act Schedule 4

items:

• 4: calendars, catalogues

• 10: goods of foreign govts

• 11…

• 15: goods imported by travellers

• 18…

• 21…

• 21A: Tradex scheme goods

• 23…

• 24…

• 25…

• 26: goods** less than $1000

• 27 …




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


From 1 July 2017 LVT will be reduced to zero

Overseas vendors required to register if sales >$75,000 p.a.

“Limited GST registration” option to be available


GST | October 2016

Goods $>1,000 Goods <$1,000

Current

Customs

duty

If dutiable, yes

(Customs Value)

Waived

GST If taxable, yes

(VoTI)

Waived




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


From 1 July 2017 LVT will be reduced to zero

Overseas vendors required to register if sales >$75,000 p.a.

“Limited GST registration” option to be available

Overseas clients who sell goods <$1000 need to know!


GST | October 2016

Goods $>1,000 Goods <$1,000

Current Post 1/7/2017

Customs

duty

If dutiable, yes

(Customs Value)

Waived Waived

GST If taxable, yes

(VoTI)

Waived If taxable, yes




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


Summary

GST | October 2016

1. VoTI changes

DIPBN 2016/33

• distinguish between customs vs GST

• 10% is an option, not mandatory

• “watch this space” for more updates from DIBP

2. Non-resident

importers

• can’t always claim GST back

• “causing goods to be brought to Australia for own

purposes”

• must be registered for GST to claim

3.

DDP

• double GST applies

• potential GST leakage if not actioned correctly

• Australian buyer may be liable if duty / GST short paid

4. LVT changes • post 1/7/17, GST applies to goods <$1,000

• no impact for Customs

• overseas vendor clients may need to register for GST




Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149



QUESTIONS ?

GST | October 2016

Wai Choong Chan

[email protected]

0411 157 934

GST


mailto:[email protected]

http://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjqx6q4xtTOAhXFRo8KHdi_D8MQjRwIBw&url=http://www.clipartbest.com/animated-ninja&psig=AFQjCNFUpYYtybJyYPAx0GX1jXdZnEL3lg&ust=1471939043952725



Colour Scheme

for Charts and

Banner Bars

R = 4

G = 30

B = 65

R = 253

G = 185

B = 19

Tones

of grey

R = 129

G = 142

B = 160

Secondary

Colour Palette

Audit

R = 174

G = 158

B = 59

Tax

R = 118

G = 107

B = 97

Financial

Advice

R = 136

G = 53

B = 77

Advisory

R = 93

G = 126

B = 149


Tel 1300 856 065

www.crowehorwath.com.au

The relationship you can count on

Disclaimer

Crowe Horwath (Aust) Ltd is a member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath is a separate and

independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of

financial services licensees.


October 2016 GST Import Issues - ftalliance.com.au · GST | October 2016 The Law Change Tax and...

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Transcript of October 2016 GST Import Issues - ftalliance.com.au · GST | October 2016 The Law Change Tax and...