Draft GST Ruling GSTR 2014/D5
The Commissioner has issued a draft ruling to explain the GST treatment of particular transactions arising in the context of development lease arrangements entered into between government agencies and private developers.
These arrangements typically have following features :
the private developer (developer) undertaking a development on land owned by a government agency in accordance with the terms of a written agreement between the developer and
the government agency supplying the land by way of freehold or grant of a long-term lease to the developer subject to the developer undertaking the development in accordance with the terms of the written agreement.
That is, the developer becomes entitled to transfer of the freehold or grant of a long-term lease when the development is completed.
In particular, the draft ruling considers:
the relevant principles for identifying and characterising the various supplies that are made for consideration under development lease arrangement, including: –
whether the grant of a short-term lease or licence (development lease) by the government agency to allow the developer to undertake the development on the land is a supply for consideration and
– whether, in completing the works on land owned by the government agency, the developer makes a supply of development services to the government agency for consideration, and
– whether the sale of the freehold or grant of the long-term lease of the land by the government agency is supply for consideration, and whether any consideration the developer provides for supply of the land includes undertaking of the development works on land owned by the government agency.
the extent to which the consideration for particular supplies made under a development lease arrangement includes consideration that is not expressed as an amount of money, ie non-monetary consideration how the value of any non-monetary consideration provided for supplies made in the context of a development lease arrangement may be determined, and the attribution, under Div 29 of the GST Act, of the GST liabilities and input tax credit entitlements that may arise under development lease arrangements.
This news story is reprinted from CCH Tax Week
Read more details on Bookkeeping Outsourcing Services
The Commissioner has issued a draft ruling to explain the GST treatment of particular transactions arising in the context of development lease arrangements entered into between government agencies and private developers.
These arrangements typically have following features :
the private developer (developer) undertaking a development on land owned by a government agency in accordance with the terms of a written agreement between the developer and
the government agency supplying the land by way of freehold or grant of a long-term lease to the developer subject to the developer undertaking the development in accordance with the terms of the written agreement.
That is, the developer becomes entitled to transfer of the freehold or grant of a long-term lease when the development is completed.
In particular, the draft ruling considers:
the relevant principles for identifying and characterising the various supplies that are made for consideration under development lease arrangement, including: –
whether the grant of a short-term lease or licence (development lease) by the government agency to allow the developer to undertake the development on the land is a supply for consideration and
– whether, in completing the works on land owned by the government agency, the developer makes a supply of development services to the government agency for consideration, and
– whether the sale of the freehold or grant of the long-term lease of the land by the government agency is supply for consideration, and whether any consideration the developer provides for supply of the land includes undertaking of the development works on land owned by the government agency.
the extent to which the consideration for particular supplies made under a development lease arrangement includes consideration that is not expressed as an amount of money, ie non-monetary consideration how the value of any non-monetary consideration provided for supplies made in the context of a development lease arrangement may be determined, and the attribution, under Div 29 of the GST Act, of the GST liabilities and input tax credit entitlements that may arise under development lease arrangements.
This news story is reprinted from CCH Tax Week
Read more details on Bookkeeping Outsourcing Services
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