A NEW TAX SYSTEM (ANTS)

1. A NEW TAX SYSTEM (ANTS)

2. A New Tax System is the name given to the range of new tax reforms due to commence on 1 July 2000. • Major elements of ANTS include; • Pay As You Go (PAYG), and • GST.

3. PAYG WHAT IS IT?

4. PAYG is simply a new withholding tax system. It applies from 1 July 2000. It is intended to replace: - PAYE (Pay As You Earn system); -PPS(Prescribed Payments System); -RPS (Reportable Payments System); -Provisional Tax; -Company instalments system.

5. GST WHAT IS IT?

6. GST is a broadly based consumption tax, which aims to tax “private final consumption” expenditure on most goods and services. • It applies from 1 July 2000

7. GST eliminates: • - Wholesale Sales Tax from 1 July 2000 • -Bed taxes from 1 July 2000; • - FID from 1 July 2001 • - Stamp Duty on marketable securities from 1 July 2001; • BAD Tax 1 July 2005; • Abolition of remaining business stamp duties deferred indefinitely.

8. GST applies to “taxable supplies”, ie; • supplies of goods and services, • connected with Australia, • by a registered person, • in the course of furtherance of an enterprise, • for a consideration; A supply is not a taxable supply if it is “GST-free” or “input taxed”.

9. GST is: - applied to domestic consumption of most goods and services, - collected at every stage of production, and therefore - paid by final consumer.

10. As an offset to the GST, Personal Income Tax rates change from 1 July 2000 • Annual SalaryRate • $0 - $6,000 0% • $6,001 - $20,000 17% • $20,001 - $50,000 30% • $50,001 - $60,000 42% • $60,001 + 47%

11. GST ! WHAT SUPPLIES ARE / AREN'T TAXED?

12. Types of GST supply • Taxable supplies • - 10% GST on sales, and • - full credit for GST paid on inputs. • Input taxed supplies • - 0% GST on sales, but • - no credit for GST paid on inputs.

13. Types of GST supply (Cont.) • GST free supplies • - 0% GST on sales, and • - full credit for GST paid on inputs. • Out of scope • - Intra-CSU supplies - internal trading.

14. GST ! WHO MUST REGISTER ?

15. Persons/organisations must register if - - they carry on a business enterprise (excluding PAYE activities, hobbies, voluntary activities),and - their annual gross turnover exceeds $50,000 or $100,000 for non profit bodies, (must register to claim input tax credits). • 90% common owner enterprises may group and lodge one GST return.

16. WHAT IF I DON'T REGISTER ?

17. Registration Treatment • A registered enterprise will: • - be able to claim input tax credits for goods and services purchased, and must • - charge 10% GST on goods and services sold.

18. Registration Treatment • An unregistered enterprise will: • - not be able to claim input tax credits for goods and services purchased, • - not charge 10% GST on goods and services sold, and • - have 48.5% of gross sale amount withheld and forwarded to the ATO.

19. GST ! HOW DO I ACCOUNT FOR IT ?

20. Accounting Treatment • Accounting for GST is on an accruals basis where the enterprise’s annual turnover > $1M • - The GST is accounted for at the earlier of the issue of a taxable invoice, or the receipt of the payment. • - CSU will account for GST through 2 clearing accounts (Input Credits & GST Liability) - budget units won’t bear the cost.

21. Accounting Treatment (Cont.) • Where the annual turnover is less than $1 million, an enterprise can choose to account for GST on a cash basis

22. WHEN IS GST SENT TO ATO ?

23. GSTTax Periods • GST paid on inputs, and collected on taxable supplies are attributable to tax periods. • A tax period is either monthly or quarterly. • CSU turnover exceeds $20 million pa, and will lodge GST monthly electronically. • GST returns to be lodged by 21st of each month, even if net amount is $0.

24. HOW IS GST SENT TO ATO ?

25. The PAYG system provides for a Business Activity Statement (BAS) • BAS is prepared either monthly or quarterly, depending upon the entities annual turnover, and is lodged by the 21st of the next month.

26. The Business Activity Statement (BAS) • BAS contains the total GST to be paid or collected plus the total amount of taxes withheld under the PAYG system. • One BAS return is made for the entire registered entity. It will be prepared the Department of Finance.

27. WHAT IS A TAX INVOICE ?

28. A Tax Invoice must: • be issued by the supplier for taxable supplies greater than $50; and • contain the entities ABN ; and • set out the GST inclusive price for the supply; and

29. Tax Invoice (Cont.) • be in the approved form; and • be provided within 28 days. • (A receipt may be construed as a Tax Invoice)

30. GST FOR CSU ! WHAT AREAS DOES IT AFFECT ?

31. Education courses that are GST free • pre school course • primary course • secondary course • tertiary course • Masters or Doctorial course • special education course

32. Education courses that are GST free • adult and community education course • English language course for overseas students • first aid or life saving course • professional or trade course • tertiary residential college course

33. GST Free Supplies (Teaching): . • Local / International students, enrolled in: - undergraduate award programs - postgraduate award programs • International exchange students • Course materials • Field Trips (excl. meals & accommodation)

34. Taxable Supplies (Teaching): • “miscellaneous students” - (students not enrolled in award program, who undertake particular but isolated subjects) • voluntary students - (students enrolled in award program, who undertake a subject in addition to award course) • Sale, lease or hire of goods (incl. textbooks) • Accommodation and food for field trips

35. GST free Supplies: • Research & Consulting Services - grants must be unconditional to be GST free.

36. Taxable Supplies: • Contract research - funding is provided by private sector on a contract basis (ATO ruling Nov. 1999) • Commercialisation of intellectual property • Consulting services made on a fee paying basis

37. GST free Supplies (Students): Administrative services directly related to supply of GST free education courses only. • enrolment services • examination arrangements • counselling services • graduation ceremonies

38. Taxable Supplies (Students): • administrative services related to the supply of taxable education courses. • Student Activities Fees (Union fees, Sports Associations, etc) • Other supplies not related to GST free courses, ie services provided to external bodies.

39. GST free Supplies (Library): • No GST on all services provided free of charge, eg Book Loans. • No GST on intra university loans

40. Taxable Supplies (Library): • Printing, photocopying, laminating • Internet/Email provided to students for a fee • Equipment hire and information retrieval services provided to students for a fee • Library Fines

41. Student Housing Taxable Supplies: • Short term accommodation provided to non-students • Prepared food supplied as part of accommodation • Vending machines for telephones, photocopiers, laundry machines and food dispensers.

42. Student Housing Input Tax Supplies: • Accommodation provided in Halls of Residence to tertiary and post graduate students.

43. OTHER UNIVERSITY FUNCTIONS Taxable Supplies: • Catering and conferencing facilities supplied to parties external to the University. • Commissions received from payroll deductions (eg Health Funds, Unions and Insurance premiums). Input Tax Supplies: • Student Loans and any additional charges incurred.

44. QUESTIONS !