March 2015 Newsletter

Mar 12, 2015

MARCH 2015 NEWSLETTER 

PART 1

GST treatment of ATM service fees, credit card and debit card surcharges - GSTR 2014-2

On 17 December 2014, the ATO issued GST ruling GSTR 2014/2 entitled "Goods and services tax: treatment of ATM service fees, credit card surcharges and debit card surcharges".

This ruling clarifies the ATO's position in respect to various fees and the GST treatment of these fees.

This ruling explains the goods and services tax (GST) treatment of:
  1. A fee payable for ATM services listed in the GST Regulations

  2. A surcharge imposed by a merchant on a customer in respect of a credit card transaction concerning supplies of goods or services by the merchant to the customer - the surcharge forms part of the consideration for the supply
    • Whether there is GST on the surcharge depends on the supply made. For example, if you are selling clothes that are subject to GST and the customer pays with a credit card, the credit card surcharge will also be subject to GST; if you are selling fruit and vegetables which are GST-free and the customer pays with a credit card, there will be no GST on the surcharge. 

  3. A surcharge imposed on a customer in respect of a credit card transaction concerning the payment of an Australian tax or an Australian fee or change subject to Division 81 of the GST Act.
    • The surcharge has the same treatment for GST purposes as the Australian tax, fee or charge. Eg. Paying for your NSW driver licence with a credit card and a surcharge applies, as there is no GST on the surcharge.

  4. A surcharge imposed by a merchant in respect of a debit card transaction concerning a supply of goods or services, a cash withdrawal or both a supply of goods or services and a cash withdrawal.
    • Whether there is GST on the surcharge depends on the supply made. For example, if you run a bakery and customers pay for their cakes with a debit card, there will be GST on the surcharge because those goods are subject to GST. 
Rules for SMSF's collectables and personal-use assets.

The ATO recently published on their website information about the rules that apply to collectables and personal-use assets of SMSFs. Some of the rules are:
  • Assets cant be leases to, used by or stored in the residence of a related party;
  • Assets must be insured in the SMSF's name within seven days of purchase; and
  • Storage decisions for these assets must be documented and the written record kept for at least 10 years.
If you are considering acquiring any collectable assets within your SMSF, please talk to us so that we can ensure you are fully aware of the potential rules regarding this type of asset.

Correcting arrangements involving private companies and shareholders and their associates

Recently, the ATO published on its website information about what to do if you have a private company that has, for example, made a loan to a shareholder that is a 'deemed dividend' for tax purposes. A tax payer can take corrective action by, for example putting the right loan documentation in place, to ensure that the amount is not captured by the 'deemed dividend' rules (colloquially known as "Division 7A").

This guidance provides clarity for various situations that may arise.

If you would like any futher information on how these changes may affect you please do not hesitate to contact our office on (07) 3088 2040 or email us at info@affinitypartners.com.au