Private ruling: Annual reporting
Published: May 2012

Ruling: Q1: Are we eligible to make an annual tax period election? | A1: Yes, you are eligible to make an annual tax period election from 1 July 2012. However, you must make the election between 1 July 2012 and 28 October 2012 by notifying the Commissioner of this.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are the director of an incorporated entity (company) which is carrying on an enterprise in the information technology industry. The company is registered for the goods and services tax (GST) and reports GST on quarterly basis. Our records show that the company registered for the GST from 1 July 2000. You went overseas some time back to attend to a personal matter. Although you had planned to return to Australia earlier, your stay overseas had to be extended for unforseen reasons. During your absence from Australia the company continued to be registered. As you were not able to determine when you would return to Australia you requested the GST registration of the company to be cancelled. In the phone conversation ATO had with you, you informed us that the GST registration of the company was cancelled last year. You returned to Australia late last year. On your return you requested the company be re-registered for the GST. Our records show that quarterly activity statement forms were dispatched to the company without interruption and that the company has reported GST on its activity statement up the first quarter of the last financial year. Our records also show that the company's GST registration has not been consistent as it has a history of cancelling registration. The records also show that the ATO has imposed penalties on the company for non-lodgement. You informed us that the company wishes to make an annual tax period election. You also informed us that the company's registration turnover threshold is less than $75,000 and that the company has not elected to pay GST by instalment amounts.

Relevant legislative provisions: Section 151-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Section 151-10 of the GST Act. | Section 151-20 of the GST Act.

Reasons for decision: Summary: Yes, you are eligible to make an annual tax period election provided you make the appropriate application between 1 July 2012 and 28 October 2012. The effective date of such an election would be 1 July 2012. | Detailed Reasoning - Detailed reasoning: Subsection 151-5(1) of the GST Act states an entity can elect to report GST annually if the entity is not required to be registered for GST and has not elected to pay GST by instalment amounts. Under section 23-5 of the GST Act an entity is required to be registered under the GST Act if the entity is carrying on an enterprise and its GST turnover meets the registration turnover threshold. You have informed us that the annual turnover of the company is less than $75,000. Therefore, the company is not required to be registered for the GST. You also informed us that the company has not elected to pay GST by instalment amounts. Therefore the company can elect to report GST annually. Under subsection 151-20(1) of the GST Act, an eligible entity must make the annual tax period election on or before 28 October in the financial year to which it relates. An entity must make the election between 1 July and 28 October in the financial year in which the entity wishes to report GST annually. You made the request on behalf of the company after 28 October 2011. Therefore, the company cannot make the election to report GST annually for the financial year ending 30 June 2012. There is provision under the GST Act for considering late application from entities electing annual reporting. These will be approved only in exceptional circumstances. The circumstance you have provided are not exceptional and therefore the company can only make the election to report annually from the commencement of the next financial year. You can make this election for the company by phoning our business direct self help service on 13 72 26 and pressing 1 for lodgement, then 2 to elect GST annual reporting. You can also do this by writing to us at PO Box 9935 in your capital city. You may make this request anytime between 1 July 2012 and 28 October 2012. If you make such a request, then the company's annual tax period election will take effect from 1 July 2012.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.