A New Tax System (Goods and Services Tax) Act 1999
|Chapter 4 - The special rules
|Part 4-2 - Special rules mainly about supplies and acquisitions
The special rules in this Part mainly modify the operation of Part 2-2, but they may affect other Parts of Chapter 2 in minor ways.
An insurer has a decreasing adjustment if, in settlement of a claim under an *insurance policy, the insurer makes one or more of the following:
(a) a payment of *money;
(b) a payment of *digital currency;
(c) a supply.
S 78-10(1) substituted by No 118 of 2017, s 3 and Sch 1 item 5, effective 1 July 2017. For application provision, see note under the definition of "digital currency" in s 195-1. S 78-10(1) formerly read:
(1) An insurer has a decreasing adjustment if, in settlement of a claim under an *insurance policy, the insurer:
(a) makes a payment of *money; or
(b) makes a supply; or
(c) makes both a payment of money and a supply.
However, this section only applies if:
(a) the supply of the *insurance policy by the insurer was solely or partly a *taxable supply; and
(i) there was no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened; or
(ii) there was an entitlement to such an input tax credit, but the amount of the input tax credit was less than the GST payable by the insurer for the taxable supply; and
(c) the insurer settles the claim for a *creditable purpose; and
(d) the insurer is *registered, or *required to be registered; and
(e) the settlement does not relate solely to one or more *non-creditable insurance events.
In working out the amount of an input tax credit for the purposes of subparagraph (2)(b)(ii), disregard sections 131-40 and 131-50 (which are about amounts of input tax credits under the annual apportionment rules).
S 78-10(2A) inserted by No 134 of 2004, s 3 and Sch 2 item 10, applicable in relation to net amounts for tax periods starting, or that started, on or after:
- (a) for entities that, on 1 October 2004, had quarterly tax periods applying to them - 1 October 2004; or
- (b) for other entities - 1 November 2004.
An event is a non-creditable insurance event if the supply of an *insurance policy would not be a *taxable supply if it were only an insurance policy against loss, damage, injury or risk that relates to that event happening.
S 78-10 substituted by No 177 of 1999, s 3 and Sch 1 item 90, effective 1 July 2000. S 78-10 formerly read:
78-10 Amount of input tax credits relating to settlements of insurance claims
(1) The amount of the input tax credit for a *creditable acquisition to which section 78-5 applies is an amount equal to 1/11 of:
(a) all payments of *money made in settlement of the claim in question; plus
(b) the market value of all supplies, made in settlement of the claim, that are not *taxable supplies; minus
(c) any payments of an excess under the *insurance policy in question.
(2) However, the amount of the input tax credit is reduced by the extent (if any) to which the settlement relates to one or more *non-creditable insurance events.
(3) An event is a non-creditable insurance event if the supply of an *insurance policy would not be a *taxable supply if it were only an insurance policy against loss, damage, injury or risk that relates to that event happening.
(4) This section has effect despite section 11-25 (which is about the amount of input tax credits for creditable acquisitions).