The new Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill, introduced this week, contains a number of proposed amendments, including in relation to the platform online marketplace rules.
The GST rules for supplies of “listed services” came into effect on 1 April 2024. This included a flat-rate credit scheme which aimed to ensure underlying suppliers, who are not GST-registered, do not experience over-taxation on these supplies. The credit is a proxy for the input tax that the underlying supplier would be able to recover as a GST deduction if they were registered. Currently, this is treated as excluded income for income tax purposes. Non-GST registered suppliers who incur expenditure in relation to their online marketplace income as well as other sources are required to apportion their expenditure to determine GST-inclusive and GST-exclusive deductions for income tax purposes.
It has been suggested that the rules are complex and place high compliance costs on these underlying suppliers.
The proposed amendments would provide certain underlying suppliers the option to include the flat-rate credit as assessable income in their income tax returns (rather than excluded income). This would allow them to deduct their expenditure for income tax purposes on a GST-inclusive basis without the need for apportionment.
If you have any questions about your tax compliance obligations, please feel free to get in touch with one of the team.