GST on imported services and digital products
From 1 July 2017 GST applies to sales of imported services and digital products to Australian businesses and consumers. This means Australian businesses buying imported services or digital products may have GST included in the price of these purchases. This includes digital products such as streaming or downloading of movies, music, apps, games and e-books, and services such as architectural or legal services.
If overseas businesses make these supplies and meet the registration turnover threshold of A$75,000, they are required to register for and pay GST. However, overseas businesses will not be required to pay GST on supplies they make to Australian registered businesses that have provided them with their ABN and state they are registered for GST. As such make sure as a business owner if importing overseas services that you provide your ABN details and state you are registered for GST.
GST on low value imported goods
From 1 July 2018 GST will also apply to sales of low value goods imported by consumers into Australia.
GST on low value imported goods will apply to physical goods sold to consumers and imported into Australia that have a value equal to or less than A$1,000. This means we will now all be paying GST on these low value goods imports.
Tax planning and Trusts
Most of us will have heard about family trusts and the tax planning benefits that are available to trustees and the beneficiaries of these trusts. The ATO continues to remind us that for this tax planning opportunities to remain available to trustees and the beneficiaries that valid trustee resolutions must be made by the trust trustees and in a timely manner.
To ensure discretionary beneficiaries are:
- presently entitled to trust income, trustees of discretionary trusts must make a resolution by 30 June of that income year. This means by 30 June 2017.
- specifically entitled to franked distributions, trustees of discretionary trusts must make a resolution in writing, specifically dealing with the franked distributions (as opposed to trust income) by 30 June
- specifically entitled to a capital gain
- trustees of discretionary trusts must make a resolution in respect of that capital gain by 31 August following the income year in which the capital gain is made
- where some or all of a capital gain forms part of the income of the trust estate, the trustee will often need to specifically deal with it by 30 June, when all of the income of the trust estate is otherwise being dealt with – this is because any capital gain forming part of the income of the trust estate cannot be specifically dealt with after a beneficiary has already been made presently entitled to it.
The resolution establishes which beneficiaries are assessed on the trust’s net income. If you are a trustee of a family trust (otherwise known as a discretionary trust), talk to your tax advisor about your trustee resolutions for the 30 June 2017 financial year or call us for a consultation.
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