POPULAR WORDS

Developers will save millions of dollars in GST for in-kind contributions made to government agencies due to a legislative amendment by the Australian Taxation Office (ATO). Prior to this amendment, developers were unfairly hit for GST on in-kind payments - such as grants of land, roads or roundabouts, and the provision of other services – as a result of the development approval. In contrast, the respective government agencies could potentially reap the benefits of corresponding GST input credits. "The amendment has been long-awaited by developers, who faced losing millions on in-kind payments," Heydon Miller, GST partner at PricewaterhouseCoopers, says. "It will eliminate administrative difficulties and confusion, cashflow issues and GST liabilities as well as remove legislation that could have inhibited the development of community facilities. "This amendment to the GST law shows the value of industry consultation with government to find a practical solution to practical problems with GST." While this style of in-kind payment is a subset of barter transactions, it is unlikely that this principle will be extended to other forms of barter transactions.