Australia’s goods and services tax (GST) follows the conventional VAT model and treats loan intermediary services as input taxed (exempt) supplies. Financial supplies are defined in regulations in terms not greatly different than found elsewhere. However, the Australian rules contain a number of features not usual elsewhere, reflecting in part different features of the Australian financial system such as the surcharge commonly imposed on sales paid by credit card. A general apportionment rule for input tax credits related to making financial supplies and taxable supplies is supplemented by a de minimis rule that allows many businesses to avoid the need for apportionment of input tax. A unique measure that deems some financial acquisitions to be financial supplies removes any possibility of investors claiming input tax credits. Another rule, adopted to remove the financial institution self-supply bias that favours large financial institutions over smaller competitors unable to bring some services in-house, provides a special ‘reduced input tax credit’ (usually 75% of the input tax) for selected inputs used by financial suppliers in the course of making supplies of loan intermediary services.

Intermediary services related to the provision of casualty insurance (for losses other than life or health) are fully subject to GST in Australia. Tax is levied on the value of insurance premiums paid by registered and unregistered policy-holders. Registered enterprises (other than those making input taxed (exempt) supplies), claim offsetting input tax credits for GST imposed on the premiums. Settlements paid to unregistered claimants attract a notional input tax credit to the insurer and settlements paid to registered claimants are out of scope payments with no GST consequences. The final result is that GST is paid on intermediary services provided to both unregistered and registered enterprises. The GST paid on intermediary services to registered enterprises is fully recovered by the enterprises (except to the extent the insured enterprises make input taxed (exempt) supplies) through the ordinary tax invoice and credit system. More detailed rules ensure similar outcomes are achieved where settlements are made in kind, where reinsurance arrangements are in place, and when insurers operate through agents.

law can be an incredibly complex subject to absorb, particularly when time is limited. Written specifically for students, Principles of Taxation Law 2016 brings much needed clarity to this area of law. Utilising many methods to make this often daunting subject achievable, particular features of the 2016 edition include: - seven parts: overview and structure, principles of income, deductions and offsets, timing issues, investment and business entities, tax avoidance and administration, and indirect taxes; - clearly structured chapters within those parts grouped under helpful headings; - flowcharts, diagrams and tables, end of chapter practice questions, and case summaries; - an appendix containing all of the up to date and relevant rates; and - the online self-testing component mentor, which provides questions for students of both business and law; Every major aspect of the Australian tax system is covered, with chapters on topics such as goods and services tax, superannuation, offsets, partnerships, capital gains tax, trusts, company tax, tax administration and state taxes.--Publisher Website

This article considers the contribution of Justice Edmonds to the jurisprudence of the goods and services tax (GST), Australia’s version of a value-added tax. The judgments deal with a range of issues including transitional issues, definitional issues, contributions by third parties and cases dealing with supplies that differ in substance from the notion services provided as well as administrative shortcomings in the legislation. As a new tax covering new concepts, the GST was genuinely open to a range of alternative interpretations. The judgments of the Full Federal Court including Edmonds J played a role in the development of GST interpretation principles both directly and indirectly by opening opportunities for statutory amendment and High Court decisions settling contentious issues, particularly in terms of identifying a supply in arm’s length transactions where form may differ from commercial substance.

In May 2016, China's indirect turnover tax on services and transfers of real property, the Business Tax, was terminated and with supplies formerly subject to the tax shifted into the VAT. This paper explains the background to the transition from the Business Tax to the VAT and the new rules that apply to the types of supplies that were transferred. A number of new rates were added to the VAT for various types of transferred supplies. Most transferred supplies are subject to ordinary VAT rules, including input tax credits for acquisitions of taxable supplies. However, more complicated rules apply to financial supplies, particularly loans. Gross interest payments are subject to VAT but borrowers are not entitled to input tax credits. Loans structured as alternative transactions such as finance leases may be treated as ordinary taxable supplies that give rise to input tax credits. Transitional rules were adopted for supplies of immovable property but not for other types of supplies.

Under the China-UK double tax agreement, UK firms deriving profits in China are protected from Chinese tax liability on the profits unless the profits are derived through a permanent establishment. Unlike the original 1984 treaty between China and the UK, the current treaty, effective from 1 January 2014, deems a UK company to have a permanent establishment in China in some circumstances where its employees provide services in China, including services provided to its subsidiaries, for more than 183 days in a 12 month period. Where this happens, the profits of the deemed permanent establishment will be subject to Chinese company income tax. The profits will normally be calculated as a percentage of the service fee paid to the UK employer for the services provided by its employees. This article explores the circumstances in which a UK employer can find itself with a deemed permanent establishment in China when seconding its employees to work in its Chinese subsidiaries and, when this happens, how its tax liability may be calculated. This article was first published by Sweet and Maxwell Ltd and is reproduced by agreement with the Publishers.