Indirect Tax Sharing Agreements

Introduction

From 1 July 2010, members of GST groups and participants in GST joint ventures may now limit their exposure to joint and several liability for the entire GST liabilities of the group or joint venture. This can be done by entering into what is known as an "indirect tax sharing agreement" (ITSA). An ITSA is designed to serve a similar purpose in the indirect tax context to a tax sharing agreement (TSA) in the income tax context. Based on the TSA experience, we expect that all GST groups will need to enter into an ITSA. To ensure maximum coverage, an ITSA should be entered into before the group's first BAS is required to be lodged after 1 July 2010 – this will be 20 August 2010 for monthly remitters.