A New Tax System (Goods and Services Tax) (Choosing to Account on a Cash Basis – Representatives of Incapacitated Entities) Determination 2025

This is a tax rule that lets certain people manage GST (Goods and Services Tax) in a simpler way when taking over a business from someone who can no longer run it themselves.

What it does: Normally, businesses must report GST when they issue invoices, even if they haven't been paid yet. This is called "accrual basis" accounting. However, some businesses can choose "cash basis" accounting instead — meaning they only report GST when money actually changes hands.

This determination says that if someone becomes legally unable to run their business (an "incapacitated entity" — for example, due to bankruptcy, mental incapacity, or death), the person appointed to take over (the "representative") can use cash basis accounting for that business.

Who it affects:

• Representatives — people appointed to manage businesses when the owner becomes incapacitated (such as bankruptcy trustees, administrators, or executors of deceased estates)
• The businesses themselves — enterprises that were being run by someone who has become incapacitated

Why it matters: Taking over a business in distress is complicated. Cash basis accounting reduces administrative burden because the representative only needs to track actual money received or paid, not unpaid invoices. This makes it easier to wind up or manage the business affairs of someone who can no longer do so themselves.

What else it does: This new 2025 determination replaces an older 2015 rule (Determination No. 39) that covered the same ground.