GST Manual for Schools

Transcription

1 GST Manual for Schools Audit Tax Advisory

2 Welcome to the 4 th Edition of the GST Manual for Schools. From the very beginnings of GST in 1999, our office has been integrally involved in the delivery of assistance to the education sector on all aspects of GST. Starting from the preparation of the very first GST Manual in 2000, and the subsequent updates in 2004 and 2006, the firm has continued to support schools in dealing with their GST affairs. In recognition of the 10th anniversary of the GST law in Australia, we have completely redesigned the GST manual and released the most comprehensive update incorporating over 40% of new material. This new version is specifically designed to provide an in-depth analysis of the GST issues affecting schools, while still covering all the general GST issues that any new staff member needs to know. By bringing together all the knowledge and experience gained since GST was introduced, the manual not only identifies but also addresses the complex GST issues affecting schools by providing practical guidance on how to deal with them. About Crowe Horwath Brisbane The Brisbane office of Crowe Horwath has remained dedicated to providing a full suite of services to the education sector; from audits and valuations, budgeting and forecasting, to FBT, GST and gift fund advice. This depth of experience is reflected in the fact that the same staff members who wrote the first edition of the GST manual in 2000 and subsequently delivered the training throughout Australia also wrote this update. That knowledge and experienced gained through 10 years of advising on the practical solutions to issues affecting schools (through seminars, GST reviews and ATO audits) has been incorporated into this new manual. As author, we trust that you find this manual an invaluable resource and tool that you can continue to use as you deal with your GST issues into the future. Should you have any feedback on the manual, we welcome your comments at education@crowehorwath.com.au. Mark Reynolds Associate Principal Brisbane 2

3 Disclaimer This manual is intended as an information source only. The comments and extracts from legislation and other sources in this publication do not constitute advice, whether legal or professional, and should not be relied upon as such. All readers, whether purchasers or otherwise, should not act solely on the basis of the information contained in this manual as they have been generalised and the tax law can apply differently to entities depending on their circumstances. Entities should seek advice from a professional advisor regarding the application of any of the comments in this publication to their particular circumstances. Crowe Horwath, its Directors, employees, consultants, contractors and the author expressly disclaim any and all liability to any person, whether a purchaser or not, for the consequences of anything done or omitted to be done by any person relying on any information in this manual. GST Law This manual is current as at 20 January All references to the GST law, rulings, cases, etc. contained in this manual are current up to that date. Copyright WHK Pty Ltd trading as Crowe Horwath is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. WHK Pty Ltd trading as Crowe Horwath 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. Copyright 2011 WHK Pty Ltd trading as Crowe Horwath (ABN ). All rights reserved. Except as permitted by the Copyright Act 1968, no part of these notes may be reproduced or published in any form or by any means, whether electronic or mechanical, and including photocopying, recording, by information storage or retrieval system, without the prior written permission from WHK Pty Ltd. A school that has purchased this manual from Crowe Horwath is permitted to make the manual available to all the employees of that respective school and make copies of the relevant schedules and parts of the manual for internal use of that school only. Associations of schools or an entity comprising a number of schools are not permitted to make a copy of this manual available to multiple schools that are members of that association or entity without prior written permission. Requests and inquiries concerning reproduction rights should be addressed to the Principal Tax Advisory, Crowe Horwath Brisbane, GPO Box 736, Brisbane Qld 4001, by at education@crowehorwath.com.au or by phone on

4 CONTENTS 1 GST Overview GST and compliance GST and schools Overview of GST and Education Taxable supplies Charities and GST GST Registration Recent Changes and ATO Audits Recent tax reviews ATO audit activity Risk management and GST GST issues still causing concern GST Fundamentals Basic GST rules How does GST work Who has to pay GST Entities Enterprise GST Registration General registration issues How to register for GST Who is required to be registered GST turnover What if an entity is required to be registered but doesn t What are the commercial benefits of being registered What obligations does registration bring Cancellation of registration Registration options The Australian Business Number rules Taxable Supplies Taxable supplies Specific modification rules Adjustment provisions Creditable acquisitions Creditable acquisitions Input tax credits creditable acquisition Special modification rules Adjustment provisions Non-Taxable Supplies How GST applies to non-taxable supplies GST-free supplies Input taxed supplies GST-free Education Supplies What is not ordinarily GST-free Principles relating to GST-free education supplies Education courses Charity Provisions GST concessions Eligibility for concessions Tuck shops or canteens Fundraising by charities Non-commercial rules for charities Donated second-hand goods Raffles and bingos Non-profit sub-entities Property and asset supplies Types of assets Assets hired, leased or sold to students Trade-in of motor vehicles Supply of residential property Commercial and other property Student accommodation Non-student accommodation Taxable supplies by Schools Modifications to the GST treatment Grants to schools Sponsorships or advertising Commissions Sale of goods Sale of food and beverages Rent or hire of premises or capital assets Sale of capital assets and premises Camps and excursions Bus services Holding of events Membership fees Forfeited deposits Waiting list fees Other supplies

5 12 GST and Religious Supplies GST-free supply of religious services Activities by religious practitioners GST Religious Groups GST Branches Accommodation provided to religious practitioners Special Topics Apportionment of consideration or acquisitions Agency Donations and sponsorships Prizes Fines and penalties Appropriations Vouchers GST and Associated Bodies What bodies may be an associated entity Is the body an entity for GST purposes What entities are associates Tax status of associates GST on supplies made by school Supplies by associated entities Tax Invoices Why are tax invoices so important Changes to tax invoice requirements Tax invoice requirements for supplies less than $1,000 (GST inclusive) Tax invoice requirements for supplies of $1,000 (GST inclusive) or more Who can issue a tax invoice Recipient created tax invoices (RCTI) Adjustment notes Combination of tax invoices and adjustment notes Input tax credits on corporate credit card statements (including fuel cards) Dealing with the ATO GST ruling system Correcting mistakes and amending BAS Integrity of systems for dealing with GST Price displays Other Tax Issues Fringe Benefits Tax (FBT) Pay As You Go ( PAYG ) Registration as tax concession charities and gift deductible entities Gift deductible entities Audit requirements Fuel tax credits Education tax refund School Transaction Summary GST treatment of income Operation of special provisions GST treatment of expenses Quick Reference Material Fact sheets GST elections No ABN Withholding declaration Checklists Relevant GST Legislation for Schools Internet Sites Glossary Index Accounting for GST Tax periods Accounting treatment of GFST Business Activity Statement and record keeping

6 1. GST Overview 1. Overview GST and Compliance GST and schools Identification of GST treatment Overview of GST and Education Education courses Course curriculum School facilities School excursions School administrative services Course materials Student accommodation Non-student accommodation Government grants School tuck shops Child care and outside school hours care Taxable supplies Charities and GST Non-commercial supplies by charities Fundraising by charities Non-profit sub-entities GST Registration Australian Business Number