Machinery of governmentHome page
> Publications > Implementing Machinery of Government Changes: A good practice guide > Taxation issues > Next: Checklist for implementing MOG changes
> Employment policy and advice
‹ Previous page
Last updated: 31 January 2007
Implementing Machinery of Government Changes: A good practice guide
7 Taxation issues
Taxation issues for both losing and gaining agencies include registration for Australian Business Numbers and the ability to claim input tax credits.
7.1 Australian Business Numbers
In 1999, portfolio Ministers agreed to a registration policy for Australian Government agencies. The policy requires each department of state, parliamentary department, prescribed agency under the FMA Act, and authority and company subject to the CAC Act, to have an Australian Business Number (ABN) and be registered for the goods and services tax (GST).
Two exceptions to this general rule are that:
- a unit within an agency subject to the FMA Act whose operations are materially independent of other operations of the agency can register as a separate entity
- a number of related Australian Government agencies that keep accounts on the same basis for the same tax periods can group together to help facilitate GST administration.
In regard to these exceptions, the relevant portfolio Minister must approve the registration before an application can be lodged with the Australian Taxation Office (ATO).
MOG changes may have consequences for ABN registration. For example, the following may apply:
- a newly created agency will be required to be registered under an ABN
- the ABN of an agency that has been abolished will need to be cancelled
- an agency that has been affected only by a change in title requires no change to its ABN (although the ATO should be advised of the title change)
- the ABNs for agencies affected by transfer of policies and programmes do not require any change.
Agencies that have been merged should contact the ATO for advice. The ATO’s website is http://www.ato.gov.au.
7.2 Input tax credits
The ATO has issued a determination to the effect that, as a result of a transfer of functions arising from MOG changes, it will treat a document issued by a supplier as a valid tax invoice for the purposes of the gaining agency claiming input tax credits in respect of that document, where the document is in the name of the losing agency. The ATO has advised that it will extend these transitional arrangements and accept these tax invoices for up to three months after the date of the MOG change.
