From 1 July 2018, purchasers of new residential premises or potential new residential land must pay the GST component of the purchase price directly to the ATO either on, or before settlement.
However, the ATO has found that some property developers were collecting the GST from purchasers on settlement of the sales of new residential property and then claiming input tax credits, whilst not remitting the GST to the ATO. In order to avoid making payments, some developers were then dissolving their businesses before their next Business Activity Statement was due. This activity is referred to by the ATO as ‘phoenixing’.
Source: colemangreig.com.au
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