With only four days until the new interest deductibility regime for rental properties is supposed to be active and still no draft legislation has emerged from the government
The government did however release an omnibus tax bill at the start of this month covering everything but the above.
As is often the case with these types of bills they contain many small changes. While small, some of these can be important and have a real impact. This bill contains too many changes to cover in a single blog. We may expand on these in a few in weeks to come. A few of the more significant ones include:
- A start on the clarification of the tax treatment (mainly GST) of Crypto currency.
- Extending the possible use of tax pooling.
- Clarification of the application of the main-home exemption from the new bright-line rule.
- Improvements to the GST treatment on the sale of mixed-use goods.
- Softening the restriction on claiming GST on second-hand goods purchased from associates.
- Changes to the GST Tax Invoices.
The last point sounds unobtrusive and has flown a bit under the radar however, it potentially has some big impacts on the way business compliance is conducted.
Under the current GST rules, invoicing requirements are very prescriptive in form and requirements. There rules have been in application for a long time and are not always practical in a modern business environment. As an example, it is currently an offense to issue more than one tax invoice for the same supply. Any duplicate must be clearly marked “copy only.” Given many modern invoices are issued electronically, it is easy for this to be missed and a ‘new’ copy simply emailed on.
The bill, if enacted in its current form, promises a raft of reforms in this area. These include:
- Removing the requirement to provide a tax invoice. Instead ‘supply information’ would be provided and kept. This is largely the information contained in a tax invoice but the method of providing this is more flexible.
- Making the correction process easier when errors are made. No debit and credit notes, simply providing corrected information.
- Easier implementation of buyer-created invoices.
- Easier record keeping requirements to support making a GST input claim.
We will keep you updated as these changes progress.