Diners Club Australia has delivered a major breakthrough in the administration of GST on business' $7.2 billion expenditure on travel and entertainment - the business card statement may be used as a substitute tax invoice.
Under the Diners Club GST solution, an employee's business card statement will clearly identify and calculate the GST component on each transaction, as well as flag GST-exempt items.
The card statement will become the only evidence required to claim most GST input tax credits.
The simple solution has been endorsed by business and received in-principle approval from the Australian Taxation Office, which has posted a draft public ruling (GSTR2000/D6) on the issue.
Diners Club Australia managing director Bryan Ericson said the administration of GST on business travel and entertainment (T&E), the third largest company expense behind salaries and information technology, could have become an expensive paper-based problem for business.
"We've cut through the back-office clutter," he said. "It's very simple; all the necessary GST details are contained on each card's statement. Individual T&E receipts accumulated by employees will not have to be submitted by the business to the ATO for assessment.
"It's been given the thumbs up by our key corporate clients because it will also ensure that every cent of GST paid on business expenses is accurately recorded, and documentary evidence kept. In addition, it will enable all GST paid to be claimed back as a tax credit, within the legislative timeframes."
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