Common errors with new GST withholding rules
The ATO has noticed some common errors made in activity statements since the introduction of “GST at settlement” on 1 July 2018.
These new laws require purchasers to withhold GST on settlement (and pay it to the ATO directly) generally when buying ‘new residential premises’ from developers.
In particular, the new “GST at settlement” law does not affect a supplier’s obligation to lodge their activity statement and report their GST liabilities on taxable supplies in the activity statement period in which settlement occurred.
In addition, suppliers are advised not to report GST that has been withheld at settlement and paid to the ATO by the purchaser. Instead, a credit for the amount the purchaser withheld and paid will appear on the supplier’s activity statement account once the activity statement is processed.
For more clarification with the new GST withholding rules, please feel free to visit our firm today and talk to our tax experts immediately. We will save you from the confusion over the errors commonly made. Visit us today!