CASE STUDIES
Case study (1) Non-resident exhibitor refunds
Assignment
We were approached by an Australian exhibition organiser to offer reclaim services to any of their exhibitors from overseas coming to Melbourne to attend a trade show.
The client wanted us to draft materials to be included into their online Exhibition Manual and were keen to promote us as a way of encouraging certain exhibitors to take up more space. The client helped to promote our services through a link on their website.
Client benefits
We were able to offer a direct, simple process for many of the overseas exhibitors to claim back a percentage of their Australian costs. It was difficult to gauge whether exhibitors saw the refund as an opportunity to increase their budget for the trade show or as a cost offset. However, as those exhibitors are now registered for Australian GST, the refund process will be streamlined for next time: many of them will come back to Australian again in two years time when the exhibition returns.
Case study (2) Conferences
Assignment
A US computer company regularly sent a number of staff each year to Australia to attend industry conferences. The company wanted to claim back GST incurred on costs such as accommodation, meals, entertainment, car hire, communications and other conference and travel costs.
Client benefits
We were able to register the non-resident entity and make a periodic claim for GST on business related costs.
We saw the real value on this assignment was to assist the client in putting together a claim template in the form that could easily accommodate data extracted from the company’s employee expense reclaim process. This streamlined the administrative tasks in preparing claims.
In addition, we were able to liaise with the Australian Taxation Office where queries arose, in order to expedite the payment of claims. Claims are now approved without queries.
Case study (3) Tourism & Leisure industry refunds
Assignment
We acted for a number of European and American VAT consultants whose foreign tour operator clients sold Australian travel packages, and who wished to register for Australian GST and secure refunds of tax charged by suppliers of Australian land content.
Client benefits
We established an efficient and streamlined case management process so as to assist offshore advisers who had a range of clients all requiring a variety of identical compliance and administrative tasks to be performed on an on-going basis.
We were able to set in place back office processes so as to minimise the costs of carrying out registration and refund compliance tasks and, where necessary, to liaise with the Australian Taxation Office to deal with queries and problems as they arose.
Over the period 2003-2005, we were able to reclaim some $5m in GST across some 20 clients.
Case study (4) Impact of head office recharges
Assignment
Our client’s US head office recharged many costs to its Australian subsidiary (who were not entitled to full input tax credits).
The recharges would result in the Australian subsidiary being required to account for Australian GST under a reverse charge mechanism, though they were entitled to claw back part of that GST cost under their apportionment/partial exemption method.
This led to an increase in costs to the subsidiary and the Group wanted to explore ways to minimize the sticking (ie non recoverable) GST.
Client benefits
We examined the recharges and found that if the Australian subsidiary made payments for certain costs (which would not have incurred GST had they been incurred directly by the subsidiary - eg salary cost, international airfares, overseas meals, accommodation and travel) as a reimbursement, rather than as a recharge payment, then considerable savings could be made.
Case study (5) Manufacturing industry
Assignment
A German manufacturer exported goods to Australia and made sales to its subsidiary there, and also directly to customers.
Our task was to ensure that the correct entity received the credit for GST paid at time of importation on the goods.
Client benefit
An entity, its agent, its shipper, or the consignee of goods can clear goods through Australian customs and pay relevant duty and taxes (GST). Where a 3rd party is involved, they will seek reimbursement of duty and taxes and charges, and it is not always clear whether the actual owner of the goods at the time is able to claim the input tax credit.
We were able to provide advice to the client (through their non-resident advisers) on structuring the transaction to ensure that they, and not their agents were able to claw back the import credit.
Case study (6) GST and Hi-tech industry sector
Assignment
Our client was a US parent whose Australian subsidiary received software and IT support services from the Australian subsidiary of a second US entity.
Our client was concerned that they (and ultimately their Australian subsidiary) was incurring GST as a component of the price paid under a global services contract, but were not able to claim it back as they were not directly invoiced for the tax.
Client benefits
We were able to bring the parties together to ensure that the requisite documentation was put in place to flow GST through the supply chain, and to allow the group to be in a position to make a claim. This significantly reduced their IT support costs in Australia.
Case study (7) Global Services
Assignment
Our client was a global services organisation who had a branch in Australia, working to a Singapore regional head office. Australian suppliers would deal with both branches and were unsure in what circumstances GST should be charged (or rather, when their supplies to our client were GST-free as an export). GST would then often become a sticking (ie non-recoverable) cost.
Client benefits
The question of when an entity is “in Australia” is different from whether an entity is “in Australia in relation to the supply”, and has been a long running issue for the Australian Taxation Office.
Whilst the branch in Australia did not make supplies, we decided to register the entity for Australian GST so that if Australian suppliers charged tax to it (whether invoices were in the name of the Singapore or Australian branches did not matter), the entity could efficiently claim back the GST through a quarterly reclaim process.