GST cash and accrual mismatches: avoiding the avoidance

Research output: Contribution to journalArticle


Australia, like many jurisdictions, allows small businesses to use cash-basis recognition of expenses and supplies when accounting for GST. Tax authorities in a number of countries have discovered that the availability of both cash-basis and accrual-basis rules opens the door to avoidance arrangements not contemplated by the legislature when the dual accounting rules were adopted. Enterprises exploited the timing mismatches between cash-basis vendors and accrual-basis customers to create input tax entitlements and consequent refunds for buyers where there were no contemporaneous output tax obligations for sellers. Legislators in the United Kingdom and New Zealand responded to these schemes with specific anti-avoidance rules. To date, Australian authorities have relied on ad hoc application of a general anti-avoidance rule to address the problem. This article considers whether a systematic fix derived from, but improving on, overseas models is preferable to the ad hoc approach currently used in Australia.
Original languageEnglish
Pages (from-to)271-283
Number of pages13
JournalAustralian Tax Review
Issue number4
Publication statusPublished - 2017

Fingerprint Dive into the research topics of 'GST cash and accrual mismatches: avoiding the avoidance'. Together they form a unique fingerprint.

Cite this