ARTICLE · 27 MAY 2013

New ATO Interpretative Decision: GST & Prepaid Rent

DLA Piper Australia

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The ATO has issued a new Interpretative Decision on "GST and the sale of commercial premises that are subject to a lease".

AustraliaTax

Matthew Cridland

On 17 May 2013, the ATO issued a new Interpretative Decision, ATO ID 2013/30, entitled: "GST and the sale of commercial premises that are subject to a lease". This is an important decision that will have implications for all entities that buy or sell tenanted commercial premises. The key points and implications are summarised below.

1. ISSUE & DECISION

The lease of commercial premises is a taxable supply and subject to GST, which is payable by the landlord. The decision sets out the Commissioner's view on whether a vendor of a commercial premises is liable for GST on prepaid rent in circumstances where a tenanted property is sold part way through the month to which the prepaid rent relates.

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