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Arts Victoria and the Goods and Services Tax (GST)
The Federal Government introduced the Goods and Services Tax, effective from July 1 2000. The following should be noted in relation to applying to Arts Victoria for funding and the payment of grants:
ABN registration
The Australian Business Number, or ABN, has been introduced to facilitate the administration of the New Tax System. As a general rule, the Victorian government will only deal with suppliers who have an ABN, unless there is clear evidence that the relevant supply is not assessable for income tax purposes (hobby or recreational interest). Arts Victoria funding programs are designed to assist professional art activities whether they are community based or organisations or individual projects. It is therefore expected that all grant applicants will have an ABN, otherwise the Government is required to deduct withholding tax at the top marginal personal income tax rate of 48.5%.
Tax invoices
Tax invoices are an integral feature of the New Tax System. Successful grant applicants with an ABN and who are registered for GST will be required to issue Arts Victoria with a tax invoice in accordance with the Australian Taxation Office (ATO) requirements. Grant payments to GST registered recipients will not be made without a valid tax invoice.
Grossing up of grant payments
The Victorian government has stated that all payments to registered suppliers of goods and services will be 'grossed-up' for GST. This means that any grant payments for a taxable supply made to you post 1st July 2000 will include 10% GST which you will be required to remit to the ATO. As stated above, grant payments (including GST) to GST registered recipients will not be made without a tax invoice. If you are registered for GST, when applying for a grant, please do not gross up the total grant request.
GST and tax advice
If you require specific assistance or further information about GST registration, ABN's and Pay-As-You-Go, please contact the Australian Taxation Office via the "Business Tax Reform Infoline" (13 24 78) or Web-site www.ato.gov.au.
Resources
For information and advice on the New Tax System, please contact the Australian Taxation Office on 13 27 88. The ATO web site also has a range of useful publications including a booklet on the New Tax System and the Arts. Information can be downloaded at www.ato.gov.au.
The Australia Council has also produced a series of bulletins on GST and the arts. These are online at www.australiacouncil.gov.au. Bulletin no. 6 has a useful overview on the implications of ABN's and Pay As You Go (PAYG) tax. |
