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Individual supply commercial property

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Individual supply commercial property

Post by emhan on Fri Feb 27, 2015 6:26 pm

Hi

Just trying to understand what the panel decision 4/2014 (Item 6) wrote :-

"An individual owing owning commercial property at any one time -
a) make a supply of 2 commercial properties / commercial land not exceeding 1 acre would be treated as not carrying out business even if the sale is more than RM500,000 in a 12 month period :"

I have friends telling me "12 month period" is based on calendar year basis and some says it is based on the 1st supply and counts from the date of 1st sale over the next eleven month to determine the above. eg. I sold a shop on 21/5/16, then from 21/5/16 to 20/5/17, i need to monitor whether i have sold >2 commercial properties.

Is the 2nd approach more reasonable to justify whether a person is making a supply and to charge GST?

emhan

Posts : 20
Join date : 2015-02-24

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Re: Individual supply commercial property

Post by joseph on Fri Feb 27, 2015 6:45 pm

Very good question.

For individuals, to determine if a venture is a business or simply a hobby, Customs will look at the frequency of transactions done, and they are more inclined to look at 12-month period from the point of first transaction to the next.

So, if you have sold 2 commercial properties in April 2015, to avoid paying GST, sell your next commercial property after April 2016.

Please note the commercial properties must be owned by you.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
Join date : 2014-09-25

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Re: Individual supply commercial property

Post by bathu14 on Wed Mar 11, 2015 2:21 am

What do you mean "to avoid paying GST" ? The seller does not pay; he only collects GST from the buyer. Unless you mean that seller does not want to have his buyer pay him the GST, which seller then passes to customs. Please advise. TQ

bathu14

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Join date : 2015-03-11

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Re: Individual supply commercial property

Post by joseph on Wed Mar 11, 2015 2:34 pm

When the seller sold the 3rd property within a 12-month period, the seller is regarded as doing business and will have to register as a taxable person and subject to GST. If he sells his 3rd property after the 12-month period, he is not considered as doing business, so he doesn't have to charge GST to his customer.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Individual supply commercial property

Post by bathu14 on Wed Mar 11, 2015 8:47 pm

ok that makes sense. TQ

bathu14

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