Consumption Tax Act 2008
Act 9 of 2008
CONSUMPTION TAX ACT 2008
Consumption Tax Act 2008 Arrangement of Sections
Act 9 of 2008 Page 3
CONSUMPTION TAX ACT 2008
Arrangement of Sections
Section
PART I - PRELIMINARY 5
1 Short title and commencement............................................................................... 5
2 Interpretation .......................................................................................................... 5
3 Fair market value ................................................................................................... 8
4 Supplies .................................................................................................................. 8
PART II - IMPOSITION OF CONSUMPTION TAX 9
5 Imposition of Consumption Tax ............................................................................ 9
6 Exempt and zero-rated supplies ............................................................................. 9
PART III - REGISTRATION 10
7 Compulsory and voluntary registration ............................................................... 10
8 Registration .......................................................................................................... 11
9 Cancellation of registration .................................................................................. 12
PART IV - PROCEDURES RELATING TO SUPPLIES AND
IMPORTS 13
10 Time of supply ..................................................................................................... 13
11 Place of supply ..................................................................................................... 14
12 Value of supply .................................................................................................... 14
13 Post-sale adjustments ........................................................................................... 15
14 Time of import ..................................................................................................... 16
15 Value of import .................................................................................................... 16
16 Reverse charge on supply of foreign services ...................................................... 16
PART V - COMPUTATION OF CONSUMPTION TAX PAYABLE 17
17 Consumption Tax in a Consumption Tax period ................................................. 17
18 Input tax credits ................................................................................................... 17
Arrangement of Sections Consumption Tax Act 2008
Page 4 Act 9 of 2008
PART VI - CONSUMPTION TAX DOCUMENTATION 18
19 Consumption Tax invoices ................................................................................... 18
20 Consumption Tax credit and debit notes .............................................................. 18
21 Consumption Tax documentation ........................................................................ 20
PART VII - CONSUMPTION TAX RETURNS AND PAYMENT 21
22 Consumption Tax returns ..................................................................................... 21
23 Consumption Tax payment .................................................................................. 21
24 Consumption Tax payable on imports.................................................................. 21
PART VIII - CONSUMPTION TAX REFUNDS 22
25 Refunds ................................................................................................................ 22
PART IX - ASSESSMENTS AND APPEALS 23
26 Consumption Tax assessments ............................................................................. 23
27 Assessment of recipient ........................................................................................ 24
28 Appeals ................................................................................................................. 25
PART X - POWERS OF THE TAXATION OFFICER 25
29 Recovery of unpaid Consumption Tax from third parties .................................... 25
30 Recovery of unpaid Consumption Tax from seizure and sale of property ........... 26
31 Persons with unpaid Consumption Tax not allowed to leave Tuvalu .................. 27
32 Businesses of persons with unpaid Consumption Tax may be temporarily
closed .................................................................................................................... 27
33 Delegation ............................................................................................................ 28
PART XI - ADMINISTRATIVE PENALTIES AND OFFENCES 28
34 Administrative penalties ....................................................................................... 28
35 Offences ............................................................................................................... 29
PART XII - MISCELLANEOUS 30
36 Priority for Consumption Tax .............................................................................. 30
37 Agreement to defeat the intention and application of the Act to be void ............. 31
38 Branches and divisions ......................................................................................... 32
39 Currency ............................................................................................................... 32
40 Regulations ........................................................................................................... 32
41 Repeals and transitional provisions ...................................................................... 32
Consumption Tax Act 2008 Section 1
Act 9 of 2008 Page 5
CONSUMPTION TAX ACT 2008
Act 9 of 2008
AN ACT TO PROVIDE FOR THE INTRODUCTION OF A
CONSUMPTION TAX AND MATTERS INCIDENTAL THERETO
ENACTED BY THE PARLIAMENT OF TUVALU
24 November 2008
Commencement [1 July 2009]
PART I - PRELIMINARY
1 Short title and commencement
(1) This Act may be cited as the Consumption Tax Act 2008.
(2) This Act shall come into force on a date or dates to be notified by the
Minister.
(3) Different parts of this Act may be brought into force by the Minister on
different dates.
2 Interpretation
In this Act, unless the context requires otherwise —
―approved form‖ means any form approved under this Act;
―associate‖, in relation to a person, means any other person who acts or may act in
accordance with the directions, requests, suggestions, or wishes of the first-
mentioned person; and the second mentioned person shall be an associate of
the first mentioned person;
Section 2 Consumption Tax Act 2008
Page 6 Act 9 of 2008
―company‖ means a body or association of persons whether or not incorporated,
created, or formed under the law of Tuvalu or elsewhere, and any co-operative
society, but does not include a partnership or trust;
―consideration‖, in relation to a supply, means the total of the following
amounts —
(a) the amount in money paid or payable by any person, directly or
indirectly, for the supply;
(b) the fair market value of an amount in kind paid or payable by any
person, directly or indirectly, for the supply to the extent that the money
is not paid under (a); and
(c) any duties, levies, fees, and charges (other than tax imposed under this
Act) paid or payable on, or by reason of the supply,
reduced by any price discounts or rebates allowed and accounted for at the
time of the supply;
―Consumption Tax‖ means the consumption tax imposed under section 5(1);
―Consumption Tax period‖ means a quarter or part of a quarter.
―Customs Officer‖ means the Customs Officer of Tuvalu under the Customs Act;
―enterprise‖ means —
(a) any independent economic activity whether or not undertaken for
pecuniary profit, including any business, trade, manufacture,
commerce, or adventure in the nature of trade; or
(b) the activity of a licensing authority in issuing a licence, permit,
certificate, concession, authorisation, or other document for a fee, but
not including —
(i) any employment;
(ii) any hobby or leisure activity of an individual; or
(iii) any activity of a person other than an individual that if carried on
by an individual would come within subparagraph (ii);
―exempt use‖ means the use of goods or services to make an exempt supply;
―financial lease‖ means —
(a) a hire purchase agreement; or
(b) any lease other than lease of land that is treated under international
accounting standards as a financial lease;
―goods‖ means any tangible or personal property, but not money;
―government entity‖ means —
(a) a department or agency of Government; or
(b) a public enterprise;
Consumption Tax Act 2008 Section 2
Act 9 of 2008 Page 7
―importer‖ has the same meaning as in the Customs Act;
―input tax‖ means the tax imposed under this Act payable in respect of a taxable
supply to, or a taxable import by, a person;
―invoice‖ means any document notifying an obligation to make a payment;
―licensing authority‖ means any person that has the responsibility to issue any
licence, permit, certificate, concession, authorisation, or other document for a
fee under any law;
―Minister‖ means the person who, at the relevant time, holds the post of Minister of
Finance within the Government of Tuvalu, or is officially acting in that
capacity;
―money‖ means —
(a) any coin or paper currency issued as legal tender, other than a coin or
paper currency that is a collector's piece; or
(b) a bill of exchange, promissory note, bank draft, or postal or money
order;
―output tax‖ means the tax imposed under this Act payable in respect of a taxable
supply made or treated as having been made by a taxable person;
―partnership‖ means two or more persons carrying on business for joint profit;
―person‖ includes a company, and any executor, administrator or trustee of any trust
or deceased estate (in their individual and collective capacity as such);
―quarter‖ means a period of three months ending upon the last day of March, June,
September or December;
―registered person‖ means a person who is registered or liable to be registered
under this Act;
―Secretary‖ means the person who, at the relevant time, holds the post of Secretary
of Finance within the Government of Tuvalu, or is officially acting in that
capacity;
―services‖ means the provision of work or facilities or anything that is not goods or
money;
―taxable import‖ means an import of goods, other than an exempt import;
―taxable person‖ means a registered person or a person treated as registered under
this Act;
―taxable supply‖ means the supply in Tuvalu by a person in connection with the
carrying on of an enterprise including a supply in connection with the
commencement or termination of an enterprise, but excluding an exempt
supply;
Section 3 Consumption Tax Act 2008
Page 8 Act 9 of 2008
―Taxation Officer‖ means the person who is, at the relevant time, the senior person
appointed by the Minister pursuant to section 77 of the Income Tax Act to
assist the Secretary with his or her responsibilities under this Act.
3 Fair market value
(1) The fair market value of a supply at a particular time shall be the ordinary
open market value of the supply in Tuvalu at that time.
(2) If the fair market value of a supply cannot be determined under subsection (1),
the fair market value shall be the amount determined by the Taxation Officer,
or in the case of an import of goods, the Customs Officer.
(3) The fair market value of consideration in kind or of an asset shall be
determined in the same manner as the fair market value of a supply, with any
necessary modifications made.
4 Supplies
(1) A sale, exchange, or other transfer of the right to dispose of goods as owner
shall be a supply of goods.
(2) An application of goods by a taxable person to a private or exempt use shall
be a taxable supply of the goods, but only if the taxable person has been
allowed an input tax credit in respect of the acquisition of the goods.
(3) The lease or hire of goods under a financial lease shall be a supply of the
goods.
(4) Anything done that is not a supply of goods or money shall be a supply of
services, including the —
(a) grant, assignment, or surrender of any right;
(b) making available of any facility or advantage;
(c) toleration of any situation;
(d) refraining from the doing of any act; or
(e) issuing of any licence, permit, certificate, concession, authorisation, or
other document by a licensing authority.
(5) A supply of goods incidental to a supply of services shall be treated as part of
the supply of services.
(6) A supply of services incidental to an import of goods shall be treated as part
of the supply of goods.
(7) A supply of services incidental to an import of goods shall be treated as part
of the import.
Consumption Tax Act 2008 Section 5
Act 9 of 2008 Page 9
(8) Subject to subsections (5) and (6), if a supply is a supply of goods and a
supply of services, the Taxation Officer may determine the extent to which
the supply shall be treated as a supply of goods or a supply of services.
PART II - IMPOSITION OF CONSUMPTION TAX
5 Imposition of Consumption Tax
(1) Consumption Tax shall be levied on —
(a) a taxable supply by a taxable person; and
(b) a taxable import.
(2) The amount of Consumption Tax payable in respect of a taxable supply or
taxable import shall be computed by applying the rate specified in subsection
(3) to the value of the taxable supply or taxable import.
(3) The rate of Consumption Tax shall be an amount determined by the Minister
by Regulation, but shall be an amount within the range from 3% to 10%..
(4) The Consumption Tax payable —
(a) on a taxable supply, shall be accounted for to the Taxation Officer by
the taxable person making the supply; or
(b) on a taxable import, shall be payable by the importer.
(5) Notwithstanding anything contained in any law, the Consumption Tax
payable by a taxable person under subsection (4)(a) shall be recoverable from
the recipient of the supply.
6 Exempt and zero-rated supplies
(1) The following supplies shall be exempt from Consumption Tax:
(a) medical, dental, nursing and health services;
(b) education services;
(c) financial services;
(d) lease of land for residential purposes;
(e) the first 50 kilowatts of domestic electricity supply, per month;
f) aviation fuel;
(g) flour, rice and cabin biscuits;
(h) sugar and cooking oil;
(i) any other type of good or service as determined by the Minister by
Regulation..
Section 7 Consumption Tax Act 2008
Page 10 Act 9 of 2008
(2) The following taxable supplies shall be subject to a zero rate of
Consumption Tax
(a) an export of goods;
(b) an export of services for use outside Tuvalu;
(c) a supply of international transport of goods or passenger services from
a place outside Tuvalu to another place or if the transport or part of the
transport is across the territory of Tuvalu;
(d) the supply of goods as part of the transfer of part or whole of a business
as a going concern by a registered person to another registered person,
provided that the supplier and recipient have —
(i) agreed in writing that part or whole of the business is supplied as
a going concern;
(ii) notified the Taxation Officer, in writing, of the details of the
transfer, at the date of the transfer on which Consumption Tax
has been credited as input tax.
(3) The following shall be exempt from Consumption Tax —
(a) imports by a government entity, other than a public enterprise;
(b) imports not exceeding $25 in value accompanying a person arriving in
Tuvalu;
(c) imports by diplomats according to law.
PART III - REGISTRATION
7 Compulsory and voluntary registration
(1) A person shall apply to the Taxation Officer for registration for
Consumption Tax —
(a) at the beginning of any 12 month period, if there are reasonable
grounds to expect that the total value of taxable supplies to be made by
the person in the person's enterprise in that period will be $100,000 or
more; or
(b) at the end of any 12 month or less period, if in that period the total
value of taxable supplies made by the person in the person's enterprise
is $100,000 or more.
(2) The Taxation Officer shall in determining whether a person is to apply for
registration under subsection (1), have regard to the value of taxable supplies
made by an associate.
Consumption Tax Act 2008 Section 8
Act 9 of 2008 Page 11
(3) A person in receipt of a supply of services to which section 16 applies and
who is not required to apply for registration under subsection (1) shall apply
for registration if:
(a) at the beginning of any 12 month period there are reasonable grounds to
expect that the total value of the services received by the person
including any other taxable supplies the person makes in that period
will be $100,000 or more; or
(b) at the end of any 12 month period the total value of services received
by the person, including any other taxable supplies the person makes is
$100,000 or more.
(4) A person making taxable supplies who is not required to apply for registration
under subsection (1) may apply for registration.
(5) An application for registration shall be in the approved form and, in the case
of an application under subsection (1), (3) or (4), shall be lodged with the
Taxation Officer within 7 days of becoming obliged to apply for registration.
(6) A person who fails to apply for registration as required under this section shall
be treated as registered from the beginning of the first Consumption Tax
period after the person became obliged to apply for registration or such later
time as the Taxation Officer may notify in writing.
8 Registration
(1) The Taxation Officer shall register a person who has applied for registration
under section 7(1) or (3) if satisfied that the person is making, or will make
taxable supplies.
(2) If the Taxation Officer is not satisfied under subsection (1) he or she may
refuse to register and shall serve an applicant under this section with written
notice of a decision to refuse to register the person within 7 days of making
the decision.
(3) The Taxation Officer shall register a person who has applied for registration
under section 7(4) if satisfied that —
(a) the person is making, or will make taxable supplies;
(b) the person has a fixed place of business;
(c) if the person has commenced carrying on business, the person —
(i) has kept proper records of its business; and
(ii) complied with the person’s obligations under other revenue
laws; and
(d) there are reasonable grounds to believe that the person will keep proper
records and lodge regular and reliable Consumption Tax returns.
(4) The Taxation Officer shall issue a person registered under this section with a
Consumption Tax registration certificate in the approved form.
Section 9 Consumption Tax Act 2008
Page 12 Act 9 of 2008
(5) Registration shall take effect —
(a) in the case of an application under section 7(1), from the beginning of
the first Consumption Tax period after the person became obliged to
apply for registration or from such later time as set out in the
Consumption Tax registration certificate; or
(b) in the case of an application under section 7(3), from the date the
provisions of section 7(3) first applied to the person or from such later
time as set out in the Consumption Tax registration certificate; or
(c) in the case of an application under section 7(4), from the date set out in
the Consumption Tax registration certificate.
(6) A registered person shall display the person's Consumption Tax registration
certificate at a conspicuous place at every place of business of the person.
(7) A registered person shall notify the Taxation Officer, in writing, of any
change in the name (including business name), address, place of business, or
nature of the business of the person within 21 days of the change occurring.
9 Cancellation of registration
(1) A registered person —
(a) shall apply for cancellation of the person's registration if the person has
ceased to make taxable supplies; or
(b) subject to subsection (2), may apply for cancellation of the person's
registration if the person's taxable supplies do not exceed the
registration threshold in section 7(1).
(2) In the case of a registered person who applied for registration under section
7(4), an application under subsection (1)(b) may be made only after the
expiration of 2 years from the date of registration.
(3) An application under subsection (1) shall be in the approved form and, in the
case of an application under subsection (1)(a), shall be lodged with the
Taxation Officer within 7 days of ceasing to make taxable supplies.
(4) The Taxation Officer shall, by notice in writing to the registered person,
cancel the registration of a person who has applied under subsection (1) if
satisfied that the person is required or permitted to apply for cancellation of
registration.
(5) The Taxation Officer shall, by notice in writing to the registered person,
cancel the registration of any person who has not applied under subsection (1)
if the Taxation Officer is satisfied that the person has ceased to make taxable
supplies.
(6) The cancellation of a person's registration shall take effect from the date set
out in the notice of cancellation.
Consumption Tax Act 2008 Section 10
Act 9 of 2008 Page 13
(7) A person whose registration is cancelled under this section shall be treated as
having made a taxable supply of any goods (including raw materials) on hand
at the time the registration is cancelled but only if the person was allowed an
input tax credit on acquisition of the goods.
(8) The taxable supply referred to in subsection (7) shall be treated as having
been made —
(a) immediately before cancellation of the person's registration; and
(b) for a value equal to the consideration paid or payable on acquisition of
the goods.
(9) If a person's registration is cancelled under this section, the person shall —
(a) immediately cease to hold out that the person is a registered person,
including in any documentation used by the person;
(b) lodge a final Consumption Tax return and pay all Consumption Tax
due, including the Consumption Tax due as a result of subsection (7)
within 15 days after the date of cancellation of the person's
registration; and
(c) immediately return the person's Consumption Tax registration
certificate to the Taxation Officer.
PART IV - PROCEDURES RELATING TO SUPPLIES AND
IMPORTS
10 Time of supply
(1) Subject to this section, a supply of goods or services shall occur on the
earlier of —
(a) the date on which the invoice for the supply is issued; or
(b) the date on which any payment (including part payment) for the supply
is made.
(2) A supply by way of a gift shall occur —
(a) in the case of goods, on the date the goods are delivered; or
(b) in the case of services, on the date the services are complete.
(3) A supply of goods by way of an application of the goods to a private or
exempt use shall occur on the date the goods are first applied to such use.
(4) If services are supplied —
(a) by way of a lease of goods (including a financial lease); or
(b) progressively under an agreement or law that provides for periodic
payments,
Section 11 Consumption Tax Act 2008
Page 14 Act 9 of 2008
the services shall be treated as successively supplied for successive parts of
the period of the lease, or agreement or as determined by law, and each
successive supply shall occur on the earlier of the dates on which the payment
for the supply is due or received.
11 Place of supply
(1) A supply of goods shall occur at the place where the goods are delivered or
made available by the supplier or, if the delivery or making available involves
transportation, the place where the goods are when the transportation
commences.
(2) Subject to subsection (3), (4) and (5), a supply of services shall occur at the
place of business from which the services are supplied.
(3) The supply of the following services shall occur in Tuvalu if the recipient uses
or obtains the advantage of the services in Tuvalu of —
(a) a transfer, assignment of, or grant of a right to use, a copyright, patent,
trademark;
(b) accountants, architects, consultants, engineers, or law practitioners;
(c) the processing of data or supplying information or any similar service;
(d) an advertising service;
(e) the toleration of any situation or the refraining from the doing of
any act;
(f) the supply of personnel; or
(g) the service of an agent in procuring a service described in this
subsection.
(4) A supply of services in connection with real property shall occur in Tuvalu if
the real property is in Tuvalu.
(5) A supply of services by a licensing authority shall be deemed to have
occurred in Tuvalu regardless of where the licence, permit, certificate,
concession, authorisation, or other document is issued.
12 Value of supply
(1) In this section, ―tax fraction‖, in relation to a taxable supply, means the
fraction calculated in accordance with the following formula —
r/(100+r)
where r is the rate of Consumption Tax applicable to the supply as determined
under section 5(3).
(2) Subject to this section, the value of a supply of goods or services shall be the
consideration for the supply.
Consumption Tax Act 2008 Section 13
Act 9 of 2008 Page 15
(3) The value of a supply of goods being the application of goods to a private or
exempt use shall be —
(a) if section 18(5) applied to the acquisition of the goods, the
consideration paid or payable on acquisition of the goods to the extent
to which an input tax credit was allowed on acquisition; or
(b) in any other case, the consideration paid or payable on acquisition of
the goods.
(4) The value of a supply of goods or services made by a taxable person to an
associate who is not a taxable person for no consideration or for a
consideration that is less than the fair market value of the supply, shall be the
fair market value of the supply at the time of the supply.
(5) Except as provided in subsection (3) or (4), the value of a supply of goods or
services for no consideration shall be zero.
(6) If a taxable supply is made without a separate amount of the price being
identified as Consumption Tax, the value of the supply shall be the price
reduced by an amount equal to the price multiplied by the tax fraction.
13 Post-sale adjustments
(1) This section applies if —
(a) a taxable supply is cancelled;
(b) the nature of a taxable supply is fundamentally varied or altered;
(c) the consideration for a taxable supply is altered; or
(d) the goods (or part thereof) the subject of a taxable supply are returned
to the supplier.
(2) If this section applies and the Consumption Tax properly chargeable in
respect of the supply exceeds the Consumption Tax actually accounted for by
the supplier, the amount of the excess shall be treated as output tax payable by
the supplier for a taxable supply made in the Consumption Tax period in
which the event referred to in subsection (1) occurred.
(3) If subsection (2) applies and the supplier has issued a Consumption Tax debit
note to the recipient of the supply in accordance with section 20(3), the
recipient of the supply shall treat the additional Consumption Tax specified in
a debit note issued herein as input tax payable by the recipient in the
Consumption Tax period in which the debit note is received.
(4) Subject to subsection (6), if this section applies and the Consumption Tax
actually accounted for by the supplier exceeds the Consumption Tax properly
chargeable in respect of the supply, the supplier shall be allowed an input tax
credit for the amount of the excess in the Consumption Tax period in which
the event referred to in subsection (1) occurred.
Section 14 Consumption Tax Act 2008
Page 16 Act 9 of 2008
(5) If subsection (4) applies and the supplier has issued a Consumption Tax credit
note to the recipient of the supply in accordance with section 20(1), the
recipient shall treat the additional Consumption Tax specified in the credit
note as output tax payable by the recipient in the Consumption Tax period in
which the credit note is received.
(6) If the recipient of a supply to which subsection (4) applies is unregistered, no
input tax credit shall be allowed under that subsection until the supplier has
repaid the excess Consumption Tax to the recipient of the supply, whether in
cash or as a credit against any amount owing to the supplier by the recipient.
14 Time of import
An import of goods shall occur —
(a) if the goods are entered under the Customs Act, on the date on which
they are so entered; or
(b) in any other case, on the date the goods are brought into Tuvalu.
15 Value of import
(1) The value of an import of goods shall be the sum of –
(a) the value of the goods ascertained for the purposes of customs duty
under the Customs Act whether or not any duty is payable on the
import;
(b) the amount of customs duty, excise, and any other fiscal charge (other
than Consumption Tax and other than levies charged under the Import
Levy (Special Fund) Act) payable on the import; and
(c) the value of any services referred to in section 4(7) not included in the
value under paragraph (a).
(2) The Customs Officer may, if the value of an import of goods cannot be
determined under subsection (1)(a) or if he or she is satisfied that the value of
an import of goods ascertained under subsection (1)(a) is not the correct value
of the goods, treat the import of goods as a supply of goods made in Tuvalu at
the relevant time and the value shall be determined in accordance with
section 3.
16 Reverse charge on supply of foreign services
(1) If a person makes a supply of services to a taxable person in Tuvalu and the
supply is not a taxable supply because the supply is not made in Tuvalu but
would have been a taxable supply had it been made in Tuvalu, to the extent
the recipient will use the supply —
(a) to make exempt supplies; or
Consumption Tax Act 2008 Section 17
Act 9 of 2008 Page 17
(b) for personal or domestic use; or
the supply shall be treated as a taxable supply made by the recipient at the
same time and for the same consideration as the actual supply.
(2) Where the supplier of the service is the taxable person receiving the service in
Tuvalu, such supplier shall be treated as a person other than the taxable person
receiving the service and the supply shall be taken to have occurred between
two separate independent persons.
PART V - COMPUTATION OF CONSUMPTION TAX
PAYABLE
17 Consumption Tax in a Consumption Tax period
The Consumption Tax payable by a taxable person in respect of taxable supplies
made or treated as having been made by the person in a Consumption Tax period
shall be computed according to the following formula —
A-B
where —
A is the total output tax payable in respect of taxable supplies made or treated as
having been made by the person in the period; and
B is the total input tax credit allowed to the person under sections 13, 18, 25, and
40(3) for the period.
18 Input tax credits
(1) Subject to this section, a taxable person shall be allowed a tax credit for input
tax payable by the person.
(2) Subject to this section a person may claim a credit for the input tax paid in
respect of trading stock held at the date of registration if —
(a) the person is registered under section 7;
(b) at the end of the last day before the date of the person's registration, the
person held goods as trading stock;
(c) the trading stock was acquired by the person in a taxable supply to, or a
taxable import by the person;
(d) the supply or import occurred no more than 3 months prior to the date
of registration; and
(e) the person can provide documentary evidence satisfactory to the
Taxation Officer, or as the case may be the Customs Officer, that input
tax has been paid on the supply or import.
Section 19 Consumption Tax Act 2008
Page 18 Act 9 of 2008
(3) Notwithstanding anything contained in this section, no input tax credit shall
be allowed in respect of a taxable supply to, or taxable import by a taxable
person to the extent that the supply or import is used by the person to make
exempt supplies or for private purposes.
(4) An input tax credit —
(a) in the case referred to in subsection (1) shall be allowed at the time of
the supply or import; or
(b) in the case referred to in subsection (2), shall be allowed on the date of
registration.
(5) Notwithstanding subsection (4)(a) an input tax credit allowed under
subsection (1) cannot be claimed by a taxable person except for the
Consumption Tax period in which the person has —
(a) in the case of a taxable supply, a Consumption Tax invoice for the
supply; or
(b) in the case of a taxable import, a bill of entry or other document
prescribed under the Customs Act for the import.
PART VI - CONSUMPTION TAX DOCUMENTATION
19 Consumption Tax invoices
(1) A registered person making a taxable supply to another registered person
shall, at the time of the supply, issue that other person with the original
Consumption Tax invoice for the supply.
(2) A Consumption Tax invoice shall contain the following particulars —
(a) the words ―CONSUMPTION TAX INVOICE‖ in a prominent place;
(b) the name and address of the supplier;
(c) the name and address of the recipient;
(d) the individualised serial number and the date on which the
Consumption Tax invoice is issued;
(e) the description of the goods supplied (including quantity or volume) or
services provided and the date on which the supply was made; and
(f) the consideration for the supply and the amount of Consumption Tax
charged.
20 Consumption Tax credit and debit notes
(1) If —
Consumption Tax Act 2008 Section 20
Act 9 of 2008 Page 19
(a) a registered person (known as ―the supplier‖) has made a taxable supply
to another registered person (known as ―the recipient‖);
(b) at the time of the supply, the supplier has issued an original
Consumption Tax invoice to the recipient;
(c) section 13(1) applies to the supply; and
(d) the amount shown on the invoice as the Consumption Tax charged
exceeds the Consumption Tax property chargeable in respect of the
supply,
the supplier shall provide the recipient with an original Consumption Tax
credit note.
(2) A Consumption Tax credit note shall contain the following particulars —
(a) the words ―CONSUMPTION TAX CREDIT NOTE‖ in a prominent
place;
(b) the name and address of the supplier;
(c) the name and address of the recipient;
(d) the individualised serial number and the date on which the
Consumption Tax credit note is issued;
(e) a brief description of the circumstances giving rise to the issuing of the
Consumption Tax credit note, including information sufficient to
identify the taxable supply to which the Consumption Tax credit note
relates; and
(f) the consideration shown on the Consumption Tax invoice for the
supply, the correct amount of the consideration, the difference between
those two amounts, and the amount of Consumption Tax that relates to
the difference.
(3) If —
(a) a registered person (known as ―the supplier‖) has made a taxable supply
to another registered person (known as ―the recipient‖);
(b) at the time of the supply, the supplier has issued an original
Consumption Tax invoice to the recipient;
(c) section 13(1) applies to the supply; and
(d) the Consumption Tax properly chargeable in respect of the supply
exceeds the amount shown on the invoice as the Consumption Tax
charged,
the supplier shall provide the recipient with an original Consumption Tax
debit note.
(4) A Consumption Tax debit note shall contain the following particulars —
(a) the words ―CONSUMPTION TAX DEBIT NOTE‖ in a prominent
place;
Section 21 Consumption Tax Act 2008
Page 20 Act 9 of 2008
(b) the name and address of the supplier;
(c) the name and address of the recipient;
(d) the individualised serial number and the date on which the
Consumption Tax debit note is issued;
(e) a brief description of the circumstances giving rise to the issuing of the
Consumption Tax debit note, including information sufficient to
identify the taxable supply to which the Consumption Tax debit note
relates; and
(f) the consideration shown on the Consumption Tax invoice for the
supply, the correct amount of the consideration, the difference between
those two amounts, and the amount of Consumption Tax that relates to
the difference.
21 Consumption Tax documentation
(1) A taxable person who for any reason does not have a Consumption Tax
invoice, Consumption Tax credit note, or Consumption Tax debit note as
required under this Part may make a written request to the supplier to issue a
Consumption Tax invoice, Consumption Tax credit note, or Consumption Tax
debit note, as the case may be.
(2) A request under subsection (1) shall be made —
(a) in the case of Consumption Tax invoice, within 60 days of the date of
the supply; or
(b) in the case of a Consumption Tax credit note or Consumption Tax debit
note, within 60 days of the event under section 13 to which the
Consumption Tax credit note or Consumption Tax debit note relates.
(3) A registered person receiving a request under subsection (1) shall comply
with the request within 14 days of receiving the request.
(4) A registered person shall issue only one original Consumption Tax invoice for
a taxable supply, or one original Consumption Tax credit note or
Consumption Tax debit note for an event under section 13, but a copy clearly
marked as such may be provided to a registered person who claims to have
lost the original.
(5) The following documents shall be maintained in respect of a registered
person —
(a) original Consumption Tax invoices, Consumption Tax credit notes, and
Consumption Tax debit notes received by the person;
(b) a copy of all Consumption Tax invoices, Consumption Tax credit notes,
and Consumption Tax debit notes issued by the person; and
(c) customs documentation relating to imports and exports of goods by the
person.
Consumption Tax Act 2008 Section 22
Act 9 of 2008 Page 21
(6) The documents referred to in subsection (5)(b) shall be maintained in
chronological order.
(7) A person shall not issue a Consumption Tax invoice, Consumption Tax credit
note, or Consumption Tax debit note other than in the circumstances specified
in this Part.
PART VII - CONSUMPTION TAX RETURNS AND PAYMENT
22 Consumption Tax returns
(1) A taxable person shall lodge a Consumption Tax return for each Consumption
Tax period within 30 days after the end of the period.
(2) A Consumption Tax return shall be in the approved form.
23 Consumption Tax payment
(1) The Consumption Tax payable by a taxable person for a Consumption Tax
period computed under section 17 shall be due and payable by the due date for
lodging the Consumption Tax return for that period.
(2) The Consumption Tax payable by an importer in respect of a taxable import
shall be due and payable at the time of the import.
(3) The liability for Consumption Tax arises by operation of this section and is
not dependent on the Taxation Officer or the Customs Officer making an
assessment of Consumption Tax due.
(4) Any Consumption Tax that has not been paid by a taxable person within 5
years after the due date for payment ceases to be payable at the end of that
period unless —
(a) the person has failed to file a Consumption Tax return for the
Consumption Tax period to which the unpaid Consumption Tax relates;
(b) The Taxation Officer has within the 5 years period required payment of
the amount by notice in writing; or
(c) the failure to pay was due to fraud, or gross or wilful neglect.
24 Consumption Tax payable on imports
(1) Except where the contrary intention appears, the provisions of the Customs
Act on imported goods shall, in so far as relevant and with such exceptions
and modifications as necessary, apply in relation to Consumption Tax payable
on a taxable import.
Section 25 Consumption Tax Act 2008
Page 22 Act 9 of 2008
(2) The Customs Officer may, by virtue of subsection (1), exercise any power
conferred on the Customs Officer by the Customs Act as if the reference to
customs duty in that Act included a reference to Consumption Tax payable on
imported goods under this Act.
PART VIII - CONSUMPTION TAX REFUNDS
25 Refunds
(1) Subject to subsection (3), if, for any Consumption Tax period, the total input
tax credit allowed to a taxable person exceeds the person's total output tax for
that period —
(a) the excess shall be carried forward and allowed as an input tax credit in
the following Consumption Tax period and any amount of the excess
not credited in that period shall be carried forward to the next following
Consumption Tax period; and
(b) any amount of the excess not credited under paragraph (a) shall, upon
written application by the person, be refunded to the person within 45
days after the date of lodgment of the application.
(2) If a taxable person has an excess input tax credit carried forward under this
section for more than one Consumption Tax period, the excess credit of the
earliest Consumption Tax period shall be allowed first.
(3) if the excess referred to in subsection (1) is due to excess input tax credits that
are a regular feature of the taxable person's business, the Taxation Officer
shall, upon application in writing, refund the excess within 45 days after
lodgment of the Consumption Tax return for the period.
(4) A taxable person who has erroneously overpaid Consumption Tax for a
Consumption Tax period may apply, in writing, to the Taxation Officer for an
input tax credit in the amount of the overpayment.
(5) If the Taxation Officer is satisfied that an application has been properly made
by a taxable person under subsection (4), the Taxation Officer shall allow the
person an input tax credit in the Consumption Tax period specified by the
Taxation Officer for the amount of the overpayment.
(6) An application under subsection (4) shall be made within 5 years from the
date of the overpayment.
Consumption Tax Act 2008 Section 26
Act 9 of 2008 Page 23
PART IX - ASSESSMENTS AND APPEALS
26 Consumption Tax assessments
(1) In this section —
―objection decision‖ means the decision of the Taxation Officer.
(2) The Taxation Officer may make an assessment of the Consumption Tax
payable by a taxable person if —
(a) the person fails to lodge a Consumption Tax return as required under
this Act;
(b) the Taxation Officer is not satisfied with a Consumption Tax return
lodged by the person; or
(c) the person has been paid a refund under section 25 to which the person
is not entitled.
(3) The Taxation Officer may make an assessment —
(a) under subsection (2)(a) or (c), at any time; or
(b) under subsection (2)(b) —
(i) if the default was due to fraud, or gross or wilful neglect, at any
time, or
(ii) in any other case, within the time specified in section 23(4) for
recovery of Consumption Tax.
(4) The Taxation Officer may, based on the information available, estimate the
Consumption Tax payable by a person for the purposes of making an
assessment under subsection (2).
(5) The Taxation Officer shall serve a notice of the assessment made under
subsection (2) on the taxable person assessed stating —
(a) the reason for the assessment as provided for in subsection (2);
(b) the Consumption Tax payable under the assessment;
(c) if the assessment is issued under subsection (2)(a) or (b), the original
due date for payment as determined under section 23;
(d) if the assessment is issued under subsection (2)(c), the due date for
payment as determined under subsection (6); and
(e) the time, place, and manner of objecting to the assessment.
(6) The Consumption Tax payable by a taxable person under an assessment
issued under subsection (2)(c) shall be due 30 days after the person was
served with the notice of assessment.
(7) The Taxation Officer may, within 5 years after serving a notice of assessment
on a taxable person, amend the assessment by making such alterations or
Section 27 Consumption Tax Act 2008
Page 24 Act 9 of 2008
additions to the assessment as the Taxation Officer considers necessary, and a
notice of the amended assessment shall be served on the person.
(8) Nothing in subsection (7) shall prevent the amendment of an assessment to
give effect to an objection decision, or a decision of the court.
(9) An amended assessment shall be deemed as an assessment for all purposes of
this Act.
(10) Nothing in this section prevents any interest and penalty payable —
(a) in respect of Consumption Tax assessed under subsection (2)(a) and
(b), from being computed from the original due date for payment of the
Consumption Tax as determined under section 23; or
(b) in respect of Consumption Tax assessed under subsection (2)(c) in the
case of an application for refund made fraudulently or negligently, from
being computed from the date on which the refund was paid.
27 Assessment of recipient
(1) If a taxable person who is the supplier has, in consequence of
misrepresentation or fraud by the recipient of a supply, incorrectly treated the
supply as —
(a) an exempt supply; or
(b) a supply subject to a zero rate of Consumption Tax under section 6,
the Taxation Officer may assess the recipient of the supply for payment of the
Consumption Tax due in respect of the supply and any interest and penalty
imposed as a result of the late payment of the Consumption Tax.
(2) The Taxation Officer shall serve notice of an assessment under subsection (1)
on the recipient specifying —
(a) the reason for the assessment as provided in subsection (1);
(b) the Consumption Tax payable;
(c) the due date for payment of the Consumption Tax; and
(d) the time, place and manner of objecting to the assessment.
(3) Subsection (1) does not preclude the Taxation Officer from recovering the
Consumption Tax due in respect of the supply together with any interest and
penalty from the supplier and —
(a) any amount recovered from the recipient of the supply shall be credited
against the liability of the supplier in respect of the supply; and
(b) any amount recovered from the supplier shall be credited against the
liability of the recipient of the supply.
(4) Any supplier who pays Consumption Tax, interest, or penalty referred to in
subsection (1) may recover the amount from the recipient of the supply.
Consumption Tax Act 2008 Section 28
Act 9 of 2008 Page 25
(5) An assessment made under subsection (1) shall be deemed as an assessment
of Consumption Tax for all purposes of this Act.
28 Appeals
The imposition of Consumption Tax may be challenged in the like fashion as that
provided for in regard to income tax by section 72 of the Income Tax Act.
PART X - POWERS OF THE TAXATION OFFICER
29 Recovery of unpaid Consumption Tax from third parties
(1) Where any Consumption Tax or other amount imposed under this Act has not
been paid by its due date, the Taxation Officer may by notice in writing
require a person:
(a) owing money to the person liable to pay the Consumption Tax or other
amount outstanding;
(b) holding money for, or on behalf of, the person liable to pay the
Consumption Tax or other amount outstanding;
(c) who is liable to make payments of salary or wages or other similar
payments to the person liable to pay the Consumption Tax or other
amount outstanding; or
(d) having authority from some other person to pay money to the person
liable to pay the Consumption Tax or other amount outstanding;
to pay the money to the Government or its nominated agent on the dates set
out in the notice, up to the amount of the Consumption Tax or other amount
outstanding due.
(2) A copy of a notice issued under subsection (1) of this section shall be
forwarded to the person liable to pay the Consumption Tax or other amount
outstanding.
(3) A person making a payment under a notice under subsection (1) of this
section shall be treated as having made the payment on behalf of the person
liable to pay the Consumption Tax or other amount outstanding and the
person liable to pay the Consumption Tax or other amount outstanding shall
not bring an action against the person making payment for recovery of that
amount.
(4) The Taxation Officer shall reduce the amount of the Consumption Tax or
other amount outstanding by the person liable to pay them, by the amount of
any payment made on that person’s behalf under subsection (3) of this
section.
Section 30 Consumption Tax Act 2008
Page 26 Act 9 of 2008
(5) Where any person who receives a notice under subsection (1) of this section
transfers any money to which the notice applies to the person who he owes
money to or is holding money on behalf of, or otherwise does not pay such
money in accordance with the notice, that person shall, if the Taxation Officer
agrees, become personally responsible for the amount outstanding under the
notice and the other provisions of this Act shall apply as if the person who
received the notice was the agent of the person liable to pay the Consumption
Tax or other outstanding amount.
30 Recovery of unpaid Consumption Tax from seizure and sale of
property
(1) Where any Consumption Tax or other amount imposed under this Act has not
been paid by any person by its due date, the Taxation Officer may request that
the Minister to make an order placing restrictions on that person’s movable
property until the Consumption Tax or other amount has been paid.
(2) Where a person to whom subsection (1) of this section applies, has not paid,
or made arrangements satisfactory to the Taxation Officer to pay, the
Consumption Tax or other amount due within 30 days of the order of the
Minister obtained under that subsection, the Taxation Officer may enter any
place and seize any movable property.
(3) Movable property that has been seized under this section shall be stored in a
place approved by the Taxation Officer for the storage of such property.
(4) If movable property has been seized under this section, the Taxation Officer
shall, as soon as practicable after the seizure, serve on the owner of the
movable property or the person who had custody or control of the movable
property immediately before seizure, a notice in writing —
(a) identifying the movable property;
(b) stating the movable property that has been seized under this section and
the reason for seizure; and
(c) setting out the terms of subsections (6), (7) and (8).
(5) The Taxation Officer shall not be required to serve a notice under subsection
(4) if, after making reasonable enquiries, the Taxation Officer does not have
sufficient information to identify the person on whom the notice should be
served.
(6) The Taxation Officer may authorise any movable property seized under this
section to be delivered to the person on whom a notice under subsection (4)
has been served if that person has paid, or makes an arrangement to pay to the
satisfaction of the Taxation Officer any Consumption Tax or other amount
due under this Act.
(7) If subsection (6) does not apply, the Taxation Officer shall detain the movable
property seized under this section —
Consumption Tax Act 2008 Section 31
Act 9 of 2008 Page 27
(a) in the case of perishable property, for such period as the Taxation
Officer considers reasonable having regard to the condition of the
property; or
(b) in any other case, for 21 days after the seizure of the property.
(8) If the detention period in subsection (7) has expired, the Taxation Officer may
sell the seized property by public auction or in such other manner as the
Taxation Officer may determine.
(9) The proceeds of disposal under subsection (8) shall be applied as follows –
(a) first toward the cost of seizing, keeping and selling the seized property;
(b) then towards the payment of the Consumption Tax or other amount due
under this Act; and
(c) the balance, if any, shall be paid to the owner of the property.
(10) The Taxation Officer may request the assistance of the Tuvalu Police Force in
delivering and putting into place any order made by a court under subsection
(2) of this section.
31 Persons with unpaid Consumption Tax not allowed to leave Tuvalu
(1) Where any Consumption Tax or other amount imposed under this Act in
excess of $500 has not been paid by any person by its due date, the Taxation
Officer may by notice in writing to the Principal Immigration Officer, require
that the Principal Immigration Officer shall prevent that person from leaving
Tuvalu, until the person:
(a) makes payment in full; or
(b) makes an arrangement satisfactory to the Taxation Officer for the
payment of the tax or other amount.
(2) In any case to which this section applies, where the conditions of paragraphs
(a) or (b) of subsection (1) of this section have been met, the Taxation Officer
shall by letter immediately inform the Principal Immigration Officer of that
fact and the Principal Immigration shall forthwith no longer prevent the
person to whom the conditions applies from leaving Tuvalu.
32 Businesses of persons with unpaid Consumption Tax may be
temporarily closed
(1) Where any Consumption Tax or other amount imposed under this Act in
excess of $500 has not been paid by its due date by any person, being a person
who is operating a business, the Taxation Officer may by notice in writing
inform that person of an intention to close down part or the whole of that
person’s business, until the person:
(a) makes payment in full; or
Section 33 Consumption Tax Act 2008
Page 28 Act 9 of 2008
(b) makes an arrangement satisfactory to the Taxation Officer for the
payment of the tax or other amount.
(2) In any case to which this section applies, where the conditions of paragraphs
(a) or (b) of subsection (1) of this section have not been met within 7 days of
the person to which it relates having received the notice, the Minister may by
letter order the immediate closure of part or the whole of that person’s
business until the conditions in paragraph (a) or (b) of subsection (1) of this
section have been met.
(3) Where the Minister makes an order hereunder, the Taxation Officer shall affix
in a conspicuous place on the front of the premises or part of a business which
has been closed, a notice bearing the words ―CLOSED TEMPORARILY
FOR NOT PAYING OUTSTANDING TAX‖.
(4) The Taxation Officer may request the assistance of the Tuvalu Police Force in
delivering and putting into place any order made by the Minister under
subsection (2) of this section.‖
33 Delegation
(1) The Taxation Officer and Customs Officer may delegate in writing any duty,
power, or function conferred to him or her under this Act.
(2) The Taxation Officer may, at any time, revoke in writing any delegation under
this section.
PART XI - ADMINISTRATIVE PENALTIES AND OFFENCES
34 Administrative penalties
(1) A person who fails to apply for registration as required by section 7 shall be
liable to a penalty equal to double the amount of Consumption Tax payable
during the period in respect of which failure occurs, commencing on the date
on which the person was required to apply for registration or such later date
the person was registered by the Taxation Officer on his or her own motion.
(2) Where a taxable person fails, in respect of any Consumption Tax period, to
submit any tax return required under this Act on or before the last day on
which same is required to be submitted, that person shall be liable to pay to
the Taxation Officer, in addition to any tax which may be payable, a penalty
of $500.
(3) Where a taxable person fails to pay any Consumption Tax due on or before
the last day on which it is payable, that person shall be liable to pay to the
Taxation Officer, in addition to the tax and any penalty imposed under
subsection (2), a penalty representing —
Consumption Tax Act 2008 Section 35
Act 9 of 2008 Page 29
(a) 10 per cent of the tax for the first month or part of the month during
which the tax remains unpaid; and
(b) 2 per cent of the tax for each subsequent month or part of the month
during which the tax remains unpaid
up to a maximum of 100 per cent of the tax.
(4) Where, without reasonable cause, any person who is required under this Act
to submit a tax return has understated the amount of Consumption Tax
payable or has overstated the amount of Consumption Tax able to be
refunded, there shall be payable, in addition to any tax and any penalty
imposed under subsections (2) and (3), a penalty which shall be:
(a) if the understatement, or as the case may be overstatement, was due to
gross carelessness on the part of the person, fifty percent (50%) of the
tax understated or overstated; or
(b) if the understatement, or as the case may be overstatement, was due to a
deliberate attempt to avoid payment of tax or obtain a refund to which
the person was not entitled, one hundred percent (100%) of the tax
understated or overstated.
(5) Notwithstanding subsection (4) of this section, where Consumption Tax has
been understated or overstated and an additional penalty under that subsection
is to be applied, the amount of that additional penalty will be reduced to:
(a) 25% of that that would otherwise apply under subsection (4) if the
person voluntarily disclosed the existence of the understatement or
overstatement before any inquiries in relation to that understatement or
overstatement had been initiated by the Taxation Officer; or
(b) 50% of that that would otherwise apply under subsection (4) if the
person voluntarily disclosed the existence of the understatement or
overstatement immediately after inquiries in relation to that
understatement or overstatement had been initiated by the Taxation
Officer.
35 Offences
(1) Every person commits an offence against this Act who —
(a) Fails to apply for registration as required by this Act;
(b) Fails to notify the Taxation Officer of a relevant change of
circumstances as required by section 8(7);
(c) Fails to apply for cancellation of registration as required by
section 9(1);
(d) Fails immediately upon cancellation to cease to hold out to be a
registered person in terms of section 9(10)(a) or to return his, her or its
registration certificate immediately upon cancellation as required by
section 9(10)(c);
Section 36 Consumption Tax Act 2008
Page 30 Act 9 of 2008
(e) Fails to provide a Consumption Tax invoice, Consumption Tax credit
note or Consumption Tax debit note as required in Part VI;
(f) Issues a Consumption Tax invoice, Consumption Tax credit note or
Consumption Tax debit note otherwise than as provided in Part VI;
(g) Makes any false return, false statement or false declaration or gives any
false information, knowing it to be false or being reckless as to whether
it was false, or intentionally misleads or attempts to mislead the
Taxation Officer in relation to any matter under this Act;
(h) Knowingly falsifies any records required to be kept under this Act;
(i) Knowingly issues any incorrect tax invoice;
(j) Knowingly misrepresents that an amount is payable as tax under
this Act;
(k) Receives or deals with goods or services, if the person knows or has
reason to believe that the tax payable on the supply has been or will be
evaded;
(l) Obstructs the Taxation Officer or any officer authorized by the
Taxation Officer acting in discharge of that officer’s duties or the
exercise of the officer’s power under this Act;
(m) Contrary to the provisions of section 33, carries on the business or part
of the business concerned or commits any other breach of an order
made under that section;
(n) Fails to keep or properly maintain records of a taxable activity carried
on by the person as required by this Act;
(o) Aids, abets, incites or conspires with any other person to commit any
offence against this Act or against regulations made under this Act.
(2) Every person who commits an offence under subsection (1) shall be liable to a
fine not exceeding $200 for the first such conviction, $400 for the second such
conviction and $800 for each subsequent conviction, or imprisonment for a
term not exceeding 2 years, or both.
(3) The Taxation Officer shall from time to time publish a list of persons who
have been convicted under this section or who have been subjected to penalty
under section 35(1) or 35(4).
PART XII - MISCELLANEOUS
36 Priority for Consumption Tax
Notwithstanding any other provisions of this Act, if a person has not paid any
amount of Consumption Tax as required under this Act, the amount of tax unpaid
will, in the application of the assets of the person, rank as follows:
Consumption Tax Act 2008 Section 37
Act 9 of 2008 Page 31
(a) If the person is an individual, upon the person’s bankruptcy or upon the
person making an assignment for the benefit of the person’s creditors,
the amount of the tax payable will rank, in order of priority,
immediately after preferential claims for wages or other sums payable
to any worker, and in priority to all other claims;
(b) If the person is a company, other than an unincorporated body or
association, upon the liquidation of the company or upon the
appointment of a receiver on behalf of the holder of any debenture
given by the company secured by a charge over any property of the
company or upon possession being taken on behalf of that debenture
holder of the property, the amount of tax payable will rank immediately
after preferential claims for wages or other sums payable to any worker,
and in priority to all other claims;
(c) If the person is a company being an unincorporated body or association,
upon the appointment of a receiver, the amount of tax payable will
rank, in order of priority, immediately after any preferential claims for
wages or other sums payable to any worker, and in priority to any
claims of holders of debentures under any floating charge (including a
floating charge which has since creation become a fixed or specific
charge) created by the body.
37 Agreement to defeat the intention and application of the Act to be void
(1) Notwithstanding anything in this Act, where the Taxation Officer is satisfied
that an arrangement has been entered into to defeat the intent and application
of this Act or of any provision of this Act, the Taxation Officer will treat the
arrangement as void for the purposes of this Act and will adjust the amount of
tax payable by any registered person (or refundable to that person by the
Taxation Officer) who is affected by the arrangement, whether or not the
registered person is a party to the arrangement, in such manner as the
Taxation Officer considers appropriate so as to counteract any tax advantage
obtained by the registered person from or under the arrangement.
(2) For the purposes of this section —
―arrangement‖ means any contract, agreement, plan or understanding,
whether or not legally enforceable, including all steps and transactions
by which it is carried into effect;
―tax advantage‖ includes —
(a) Any reduction in the liability of a registered person to pay tax;
(b) Any increase in the entitlement of a registered person to a refund
of tax;
(c) Any reduction in the total consideration payable by a person in
respect of any supply of goods or services.
Section 38 Consumption Tax Act 2008
Page 32 Act 9 of 2008
38 Branches and divisions
(1) An enterprise conducted by a taxable person in branches or divisions shall be
deemed to be a single enterprise for the purposes of this Act.
(2) An enterprise conducted in branches or divisions shall be registered in the
name of the person conducting same and not in the names of the branches and
divisions.
39 Currency
(1) An amount taken into account under this Act shall be expressed in Australian
dollars.
(2) If any amount is expressed in a currency other than Australian dollars, the
amount —
(a) in the case of an import of goods, shall be converted into Australian
dollars at the exchange rate applicable for the purposes of computing
the customs duty payable on the import; or
(b) in any other case, shall be converted to Australian dollars at the mid
exchange rate applying between the foreign currency and the Australian
dollar on the date the amount is taken into account for the purposes of
this Act.
40 Regulations
The Minister may make Regulations —
(a) prescribing forms and fees required under this Act; and
(b) for the proper and efficient administration of this Act.
41 Repeals and transitional provisions
(1) In this section, ―sales tax‖ means sales tax imposed by the Sales Tax Act.
(2) The Sales Tax Act is hereby repealed.
(3) The Schedule to the Room Tax Act is hereby amended by deleting the
amount‖1-%‖, and substituting therefore the amount ―7%‖.
(4) Subject to subsection (5), if —
(a) at the end of the last business day before the beginning of the first
Consumption Tax period after commencement of this Act, a registered
person held goods as trading stock;
(b) the goods were acquired not more than 3 months before the beginning
of the first Consumption Tax period after commencement of this Act;
and
Consumption Tax Act 2008 Section 41
Act 9 of 2008 Page 33
(c) the Taxation Officer or the Customs Officer is satisfied that sales tax
has been paid on the acquisition or import of those goods,
the person may claim an input tax credit for the sales tax paid in the first
Consumption Tax period after the commencement of this Act.
(5) No input tax credit shall be allowed under subsection (3) for any sales tax paid
in respect of the acquisition of any goods if Consumption Tax imposed on a
supply or import in acquisition of those goods after the commencement of this
Act would not qualify for a full input tax credit because of the application of
section 17(4) or (5).
(6) A person claiming an input tax credit under subsection (3) in respect of
trading stock on hand at the beginning of the first Consumption Tax period
after commencement of this Act shall submit a list of the trading stock with
the person's first Consumption Tax return, supported by documentary
evidence of the payment of sales tax.
(7) If a registered person concluded a contract before the commencement of this
Act, the person shall recover any Consumption Tax payable on taxable
supplies made by the person under the contract after the commencement of
the Act and such Consumption Tax shall be recovered notwithstanding that
the contract contained no provision relating to the recovery of Consumption
Tax.
