Do you need an Indirect Tax Sharing Agreement?

Thursday 24 June 2010

The Australian GST law has been changed to allow members of a GST group (Members) and participants in a registered GST Joint Venture (Participants) to enter into Indirect Tax Sharing Agreements (ITSAs) from 1 July 2010. Like Tax Sharing Agreements for income tax consolidated groups, ITSAs allow Members and Participants to limit their liability for the GST liabilities in respect of a GST group or registered GST Joint Venture (GST JV) in certain circumstances.

We expect that most GST groups or GST JVs will want to take full advantage of the new laws and enter into an ITSA before 20 August 2010.

We can assist with drafting ITSAs and provide advice on associated issues.

This update explores the effect of an ITSA on joint and several liability of Members and Participants, the requirements for an ITSA and the consequences of entering into an ITSA.