Understanding Buyer Obligations under GST Withholding Rules
Buyers acquiring residential premises or potential residential land must adhere to GST withholding rules. Here's what buyers need to do:
Determine Withholding Amount: Calculate the amount to be withheld.
Notify the ATO: Inform the ATO of the withholding obligation.
Withhold Amount: Withhold the determined amount, typically at settlement.
Pay to the ATO: Transfer the withholding amount to the ATO, either directly or indirectly through the seller.
To ensure compliance, buyers must follow these steps:
Step One: Review 'Supplier Notification'
Under S.14-255(1) of Schedule 1, sellers must provide a 'supplier notification' to buyers before settlement, indicating whether GST withholding applies. Buyers can rely on this notification to determine their withholding obligation, ensuring the information is correct. However, buyers cannot rely on false information. The notification also includes details like the seller's name and ABN, withholding amount, payment due date, and GST inclusive contract price.
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