ATO issues draft GST Ruling on Financial Assistance Payments

On 2 November 2011 the ATO issued draft GST Ruling GSTR 2011/D4 ‘Goods and Services tax: financial assistance payments’.  This ruling is intended to replace GSTR 2000/11 ‘Goods and Services tax: grants of financial assistance’.

The draft ruling deals with the GST treatment of the following matters:

  • what constitutes a taxable supply in return for a financial assistance payment, including determining the relevant nexus between supply and consideration;
  • sponsorships
  • gift to non-profit bodies;
  • non-monetary consideration;
  • financial supplies.
The ruling also details the transitional rules catering for the replacement of the current ruling.
Comments are invited on the ruling by 16 December 2011.
Stay tuned for a more detailed analysis of the draft ruling.

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