Goods and Services Tax: Waiver of Adjustment Note Requirement (Corporate Card Statements) Determination 2020

The determination creates or refines several concepts that are central to its operation.

Corporate card is defined broadly as a card or account (even where no physical card is issued) that is issued to and in the name of an entity or other entities at its request, and is intended to be used to purchase goods and services for commercial purposes. This includes both physical cards and virtual accounts, so it captures fuel cards, travel cards, procurement cards and other similar payment products.

Corporate card provider is defined by an inclusive list: American Express Australia Limited, Cabcharge Australia Limited, Diners Club Pty Limited, entities that issue Visa corporate cards, Lufthansa AirPlus Servicekarten GmbH (Airplus International), Qantas Airways Limited, or any entity authorised by those entities to provide their corporate card products. This list is exhaustive in its statutory effect - only those named entities (and their authorised distributors) can rely on the signed statement framework, though the waiver applies to any corporate card that meets the definition, regardless of the provider’s identity.

Cardholder is the entity participating in an arrangement under which the corporate card is issued to that entity (or to other entities at its request). This means the cardholder is the GST-registered entity that makes the creditable acquisition and claims the decreasing adjustment. The definition distinguishes the cardholder from the individual user of the card, who may be an employee or agent.

Corporate card statement is a statement for a corporate card issued by or on behalf of a corporate card provider. It includes electronic data files of transactions and statements issued periodically or on demand. The determination therefore covers both paper statements and electronic feeds, which is important for modern treasury and accounting systems that ingest transaction data in real time.

Mixed transaction supplier is a supplier that has indicated on a signed statement that it provides taxable supplies as well as GST-free and/or input taxed supplies. This concept matters because the signed statement method for calculating the GST adjustment depends on whether the supplier only makes taxable supplies at 1/11th of the price (section 10(a)), or is a mixed supplier or has a different GST fraction (section 10(b)).

Adjustment event is not redefined; it takes its meaning from the GST Act. The waiver applies to decreasing adjustments arising from adjustment events in respect of acquisitions made on the corporate card. Typical adjustment events include price changes, returns, discounts, or bad debts.

Signed statement is not explicitly defined as a separate concept, but section 9 sets out its required content: the supplier’s ABN, the types of supplies made, whether GST is calculated at 1/11th, and an undertaking to notify the corporate card provider if registration ceases or the GST treatment changes. The signed statement is a standing declaration, not linked to a specific transaction.

Estimated GST amount refers to the adjustment calculated under section 10(b) where the corporate card provider does not have certainty about the correct GST fraction. Such amounts must be flagged for verification and cannot be used as the basis for the waiver under section 7(1)(c).

These concepts create a self-contained framework within the broader GST law, allowing the waiver to operate with legal certainty while preserving the Commissioner’s ability to audit the underlying accuracy of the data.

The primary beneficiary of the waiver is the cardholder - the GST-registered entity that uses a corporate card to make creditable acquisitions and later claims decreasing adjustments. The cardholder is relieved from the need to hold an adjustment note from each supplier for each adjustment event, provided it meets the conditions. This entity is typically a business or other enterprise that issues corporate cards to employees, officers, or authorised agents for commercial purchases. The determination affects its compliance burden directly: it can reduce the administrative cost of collecting and storing adjustment notes, but it also imposes new obligations to maintain two “effectively regulated corporate policies” under section 12 and to rely on the accuracy of corporate card statements.

The corporate card provider or acquirer is also affected. These entities are responsible for issuing corporate card statements that meet the information requirements of section 8 and the accuracy requirements of section 11. They must also maintain an accurate method of obtaining or calculating the transaction information, particularly the supplier’s ABN, the date of the adjustment event, and the price difference. If the provider chooses to use the signed statement method under section 9, it must obtain and retain signed statements from suppliers for at least five years after the supplier ceases its association with the provider. This imposes a record-keeping burden and a verification duty. Providers who fail to meet the accuracy requirements risk causing cardholders to lose the waiver, potentially leading to disputes or penalties.

Suppliers of goods and services acquired via corporate card are indirectly affected. They may be asked to provide a signed statement to the corporate card provider or acquirer under section 9. This statement requires them to disclose their ABN, the nature of their supplies (taxable, GST-free, input taxed), and to undertake to notify the provider if their GST status changes. Suppliers who refuse or fail to provide an accurate signed statement may cause the corporate card provider to revert to estimated GST amounts or to omit adjustment data from statements, thereby shifting the adjustment note burden back to the cardholder. For suppliers that provide taxi travel, section 8(d)(ii) permits use of a driver ID instead of the supplier’s identity, which reduces the compliance burden on taxi drivers and operators.

Employees or agents who use corporate cards are not directly regulated by this determination, but the cardholder must have a policy for determining decreasing adjustments for acquisitions that are “wholly or partly of a private or domestic nature” (section 12(a)). This means employees’ personal use of corporate cards creates a compliance requirement for the employer, affecting reimbursement processes and record-keeping.

The Commissioner of Taxation is the grantor of the waiver and retains the power to audit compliance. The determination does not limit the Commissioner’s ability to require production of adjustment notes or other evidence if the conditions for the waiver are not met. Overall, the determination redistributes compliance costs: it reduces the burden on cardholders to chase adjustment notes but increases the burden on corporate card providers to maintain accurate data and on cardholders to implement and enforce corporate policies.

The determination imposes several duties on cardholders and corporate card providers/acquirers, and grants rights to rely on the waiver.

Duties of the cardholder:

• At the time of giving the GST return or BAS for the tax period, the cardholder must hold a corporate card statement that records the transaction and meets the information requirements in section 8 (section 7(1)(a)).
• The cardholder must have in place an “effectively regulated corporate policy” that includes the retention of documentary evidence for determining the amount of decreasing adjustments relating to acquisitions on the corporate card that are wholly or partly of a private or domestic nature (section 12(a)).
• The cardholder must have an “effectively regulated corporate policy” that ensures the adjustment note and the corporate card statement are not incorrectly used to claim decreasing adjustments more than once for an adjustment event (section 12(b)).
• The cardholder must not rely on an estimated GST amount calculated under section 10(b) in the corporate card statement (section 7(1)(c)). If such an amount appears, the cardholder must obtain an adjustment note before attributing the decreasing adjustment (as required by subsection 29-20(3) of the GST Act).

Duties of the corporate card provider/acquirer:

• The corporate card provider/acquirer must meet the accuracy requirements set out in section 11: if it has reason to consider any information in section 8(d) or an estimated GST amount is not accurate, it must not include that information on the corporate card statement. This is a strict duty: the provider cannot knowingly or recklessly include inaccurate data.
• The corporate card provider/acquirer must have in place an accurate method of obtaining or calculating the transaction information specified in paragraph 8(d) (section 7(2)(b)).
• If the corporate card provider/acquirer chooses to use the signed statement method, it must obtain a signed statement from each supplier meeting the content requirements of section 9(1) and must retain that statement for at least five years after the supplier ceases association (section 9(2)).
• For suppliers who are mixed transaction suppliers or where GST may not be 1/11th of the price, if the provider uses the signed statement method to calculate an estimated GST amount, it must indicate that the amount must be verified, advise the cardholder to obtain an adjustment note, and prominently display at least one of these requirements on the corporate card statement (section 10(b)(i)-(iii)).

Rights of the cardholder:

• The cardholder has the right to attribute a decreasing adjustment to a tax period without holding an adjustment note, provided all the requirements are satisfied (section 6). This reduces the procedural burden of claiming adjustments for corporate card transactions.
• The cardholder may rely on the corporate card statement as evidence for the decreasing adjustment, without needing to obtain separate adjustment notes for each adjustment event.
• In the case of reimbursements covered by section 111-5 of the GST Act, the cardholder is taken to meet paragraph 7(1)(a) if it holds a corporate card statement that includes the details in section 8 for the expense for which reimbursement is paid (section 13). This extends the waiver to reimbursement scenarios.

Rights of the corporate card provider/acquirer:

• The corporate card provider/acquirer may choose to use the signed statement method (section 9) as an efficient way to obtain transaction information, rather than requiring individual adjustment notes or detailed transaction-level data from each supplier.

These duties and rights operate within the existing GST framework. The determination does not create a freestanding entitlement; it only modifies the evidentiary requirements for one specific compliance step.

The determination itself does not create any new penalty provisions. Enforcement of the GST law’s requirements, including incorrect claims for decreasing adjustments, continues under the Taxation Administration Act 1953 (TAA) and the GST Act.

If a cardholder claims a decreasing adjustment relying on the waiver but does not in fact satisfy all the conditions in sections 7 and 12, the claim is likely to be treated as not substantiated. The Commissioner may disallow the decreasing adjustment and impose penalties for shortfall amounts under Division 284 of Schedule 1 to the TAA. For example, if the cardholder does not have an effectively regulated corporate policy under section 12, or if the corporate card statement contains an estimated GST amount that was not verified, the waiver does not apply, and the cardholder should have held an adjustment note. Failure to do so could result in an administrative penalty of up to 75% of the tax shortfall, depending on the degree of care exercised.

Similarly, if the corporate card provider or acquirer includes inaccurate information on a corporate card statement despite having reason to consider it inaccurate (section 11), the cardholder’s waiver is jeopardised. The provider itself does not face a direct penalty under this determination, but it could face liability under general law for misleading conduct or under the TAA if it assists in the preparation of false statements.

The signed statement method imposes a record-keeping obligation on the provider (section 9(2): retain for 5 years). Failure to retain signed statements may not be directly penalised under this determination, but it would undermine the provider’s ability to rely on the method, exposing cardholders to audit risk.

The requirement for an “effectively regulated corporate policy” (section 12) is a term not defined in the determination. If the Commissioner audits a cardholder and finds that the policy was not effectively regulated (e.g., no enforcement, no training, no documentation), the waiver will be lost. This creates a latent risk: the cardholder must be able to demonstrate that the policy is not merely a paper document but is actually implemented and monitored.

There is no specific offence provision for claiming the waiver in bad faith, but the general anti-avoidance provisions of Part IVA of the TAA (if applicable) or the GST anti-avoidance provisions in Division 165 of the GST Act could apply if arrangements are entered into for the sole or dominant purpose of obtaining a waiver benefit.

Practically, enforcement is audit-driven. The Commissioner may request to see the corporate card statement, the signed statements (if used), and evidence of the corporate policies during a review. The determination shifts the evidentiary burden from holding a specific adjustment note to holding accurate statement data and policies, but the ultimate substantiation risk remains with the cardholder. The determination does not reduce the underlying requirement that a decreasing adjustment must be correct in law; it only provides an alternative documentary path.

This determination is made under subsection 29-20(3) of the GST Act, which empowers the Commissioner to determine that a decreasing adjustment may be attributed to a tax period even if the entity does not hold an adjustment note. It therefore operates as a specific exemption within the GST Act’s framework for adjustment notes.

Interaction with the GST Act: The key section is 29-20, which generally requires an entity to hold an adjustment note before attributing a decreasing adjustment to a tax period, unless the Commissioner determines otherwise. This determination is that determination. It does not override any other provision of the GST Act. For instance, the underlying rules for adjustment events (Division 19), creditable acquisitions (Division 11), and attribution (Division 29) remain unchanged. The waiver only affects the evidentiary requirement; the substantive entitlement to a decreasing adjustment must still be established under the law.

Interaction with section 111-5 of the GST Act: Section 111-5 deals with decreasing adjustments for reimbursements of employees or agents. Section 13 of the determination extends the waiver to reimbursement scenarios, modifying the information requirements accordingly. The cardholder is deemed to hold a corporate card statement that includes the section 8 details for the expense being reimbursed. This is a practical extension because many corporate card transactions involve employee reimbursements. Without this modification, the waiver would not fit the reimbursement context where the decreasing adjustment relates to the expense and not the cardholder’s own acquisition.

Interaction with the Tax Administration Act 1953: The record-keeping and penalty provisions of the TAA apply to all GST obligations. The determination does not alter the requirement to keep records under section 382-5 of Schedule 1 to the TAA. The corporate card statement, signed statements, and corporate policy documents become part of the records that must be retained for at least five years.

Interaction with the Corporations Act 2001: The requirement for an “effectively regulated corporate policy” in section 12 may intersect with corporate governance duties. Directors and officers have obligations to maintain adequate internal controls. A failure to implement the required policies could have broader corporate law implications beyond GST compliance, though the determination itself does not create a Corporations Act liability.

Interaction with other Commissioner determinations: This determination repeals and replaces the 2018 determination. It does not affect other waiver determinations under subsection 29-20(3), which may apply to different types of transactions or entities.

Interaction with common law principles of agency and reimbursement: The definition of “supplier” includes an agent through whom the supplier makes a supply (section 5). This preserves the existing agency principles. Additionally, section 13 clarifies that the waiver applies to reimbursement transactions under section 111-5, which itself incorporates agency concepts.

The determination should be read together with the GST Act and the TAA. It does not create a standalone regime. Practitioners must ensure that all other GST requirements for decreasing adjustments are satisfied, including that the adjustment event is genuine and the amount is correctly calculated.

This determination, made on 2 December 2019 and registered on the Federal Register of Legislation, repeals and replaces the Goods and Services Tax: Waiver of Adjustment Note Requirement (Corporate Card Statements) Determination 2018 (F2018L01352, registered 27 September 2018).

The earlier determination was itself a reissue of an earlier instrument, likely the 2015 or 2017 determination (though not cited in the source). The 2018 determination had a similar structure and list of corporate card providers. The 2020 determination updates the list of corporate card providers to include “Lufthansa AirPlus Servicekarten GmbH (Airplus International)” and “Qantas Airways Limited,” which were not listed in the 2018 version. It also refined the definitions and requirements, such as clarifying that the corporate card statement may include electronic data files and that the cardholder must hold the statement at the time of giving the BAS, not merely at the time of the adjustment.

The commencement date is the day after registration on the Federal Register of Legislation. This is standard for legislative instruments of this type. There is no transitional provision in the source; the 2018 determination is simply repealed on commencement. Therefore, any decreasing adjustment attributable to a tax period that ends before the commencement of the 2020 determination may be subject to the 2018 determination. Cardholders should ensure they apply the correct version for each tax period.

The substance of the waiver has not changed dramatically between the two versions. The core conditions - holding a corporate card statement with specified information, accuracy requirements, signed statement method, and cardholder policies - remain largely consistent. The changes appear to be housekeeping adjustments to reflect market developments and administrative experience.

No amendment history is provided within the instrument itself for the 2020 version, and no subsequent amendments are noted in the source. The instrument is current as of the date of registration. Future amendments may occur as the corporate card industry evolves or as administrative practices change.

The instrument is a disallowable legislative instrument under the Legislation Act 2003 and is subject to parliamentary scrutiny. It may be disallowed by either House of Parliament within 15 sitting days of tabling, though this is standard for such determinations.

The source does not reference any litigation concerning this determination or its predecessor. The instrument itself has not been the subject of any reported judicial consideration as of its date. There is no administrative appeals tribunal decision or court case cited in the text.

The absence of litigation is consistent with the determination’s nature as a concessional waiver: it reduces compliance burdens and is unlikely to be challenged by taxpayers. If anything, taxpayers would prefer that the waiver be available. Litigation could arise if the Commissioner argues that a cardholder fails to meet the conditions and disallows a decreasing adjustment, but no such cases have been noted in the source.

Practitioners should be aware that the interpretation of key terms such as “effectively regulated corporate policy” (section 12) and “reason to consider any information… is not accurate” (section 11) is untested in court. These are factual and contextual standards. If a dispute arises, the Administrative Appeals Tribunal or Federal Court would need to construe these phrases, potentially using extrinsic materials such as the explanatory statement (not provided in the source).

The litigation history under the GST Act generally includes cases on adjustment notes, such as FCT v Rel Corporate Group Pty Ltd (2018) and others, but those cases do not involve this specific determination. The determination’s reliance on the GST Act’s definition of adjustment events and decreasing adjustments means that general GST jurisprudence on those concepts will inform its interpretation, but there is no direct precedent on the waiver itself.

The lack of litigation may also reflect that the determination works effectively in practice, reducing the need for disputes. However, it also means that uncertainties in the text have not been judicially clarified, creating potential risks for cardholders who push the boundaries of the conditions.

The determination contains several traps for the unwary practitioner.

The estimated GST amount trap: Section 7(1)(c) provides that the waiver does not apply if the decreasing adjustment on the corporate card statement has an “estimated GST amount” calculated under section 10(b). This is a critical limitation. If the corporate card provider uses the signed statement method for a supplier that is a mixed transaction supplier or for which GST may not be 1/11th of the price, the statement must flag the estimated amount and advise the cardholder to obtain an adjustment note. The cardholder cannot rely on that estimated amount for the waiver. Practitioners must check each corporate card statement for any such flag; if an estimated amount appears, the old adjustment note requirement revives. Failing to do so and claiming the decreasing adjustment without an adjustment note could result in a shortfall penalty.

The “effectively regulated corporate policy” requirement: Section 12 requires the cardholder to have in place two “effectively regulated corporate policies.” The term “effectively regulated” is not defined. It suggests that the policy must be more than a document; it must be implemented, monitored, enforced, and periodically reviewed. A cardholder that maintains a policy on paper but does not train employees, enforce compliance, or retain evidence of the policy’s operation may not satisfy the requirement. In an audit, the Commissioner may request minutes of board or management meetings, training records, or evidence of disciplinary action for policy breaches. A mere policy document is unlikely to be sufficient.

Private use of corporate cards: Section 12(a) requires a policy for determining decreasing adjustments relating to acquisitions that are wholly or partly of a private or domestic nature. This is a high-risk area. Many corporate cards are used for mixed business and private expenses (e.g., fuel, entertainment). The cardholder must have a method for identifying and apportioning adjustments for private use. Without a robust policy, the entire waiver could be lost for all adjustments, not just the private ones. The policy must include retention of documentary evidence, which may include driver logs, receipts, or employee declarations.

The supplier’s signed statement is not forever: Section 9(1)(d) requires the supplier to undertake to notify the corporate card provider when it ceases GST registration or ceases to make only taxable supplies at 1/11th. If the supplier fails to notify, the provider may continue to apply the erroneous method, and the cardholder’s reliance on the waiver could be unsound. The cardholder cannot control the supplier; it must rely on the provider’s systems. The determination does not require the provider to verify the signed statement periodically, only to retain it. This creates a gap.

Reimbursement pitfalls: Section 13 modifies the waiver for reimbursements, but only where section 111-5 of the GST Act applies. If the reimbursement does not fall within section 111-5 (e.g., because it is paid to a contractor rather than an employee), the modification does not apply, and the general conditions must be met directly. Practitioners must confirm the legal basis of the reimbursement.

No grace period for statement inaccuracies: Section 11 requires the corporate card provider to exclude inaccurate information if it has reason to consider it inaccurate. There is no materiality threshold or grace period for correction. If the provider later discovers an inaccuracy and does not correct statements, the provider breaches the accuracy requirements, and subsequent cardholder claims relying on those statements are invalid. Cardholders should regularly review statements for anomalies and request corrections promptly.

The list of corporate card providers is closed: Only the entities listed in section 5 (and their authorised distributors) can use the signed statement method. A cardholder using a corporate card from a provider not on the list may still qualify for the waiver if the provider otherwise meets the accuracy and information requirements, but the signed statement method is not available unless the provider is listed. Smaller or niche card issuers are not covered.

These gotchas underscore that the waiver is not a shortcut; it substitutes one compliance regime for another with its own complexities and risks.

Compliance with this determination requires a systematic approach across the organisation and coordination with corporate card providers.

Step 1: Confirm the card provider’s capabilities. The cardholder should obtain a written confirmation from the corporate card provider that the provider meets the accuracy requirements in section 11 and maintains an accurate method for obtaining or calculating the transaction information in section 8(d). If the provider offers the signed statement method, confirm that it has obtained the necessary signed statements from suppliers and will flag estimated GST amounts as required by section 10(b).

Step 2: Implement the two required corporate policies. The cardholder must have an “effectively regulated corporate policy” under section 12(a) for determining decreasing adjustments for acquisitions of a private or domestic nature. This policy should include: (a) a definition of private and domestic use; (b) a process for employees to report private use; (c) a method for apportioning adjustments (e.g., percentage allocation or actual tracking); and (d) a requirement to retain documentary evidence (e.g., odometer logs, receipts). The policy under section 12(b) must ensure that adjustment notes and corporate card statements are not double-counted. This could include segregation of duties, reconciliations, and a prohibition on claiming the same adjustment twice. Both policies must be documented, communicated to relevant staff, and enforced through training and periodic audits. Records of implementation should be retained.

Step 3: Verify each corporate card statement before claiming. For each tax period, review the corporate card statement to ensure it contains all the information required by section 8: date of statement, cardholder identity or ABN, user name or vehicle identifier, and for each transaction containing a decreasing adjustment, the date of the adjustment event, supplier identity (or driver ID for taxi travel), supplier ABN, branch registration if applicable, brief explanation or industry code, adjustment amount or statement that the price difference includes GST, and the price difference. Check that no transaction is flagged as an estimated GST amount under section 10(b). If an estimated GST amount appears, the waiver does not apply for that transaction; the cardholder must obtain an adjustment note from the supplier before claiming the decreasing adjustment.

Step 4: Maintain records. Keep each corporate card statement used as the basis for a decreasing adjustment claim. Retain evidence of the corporate policies and their enforcement. If the cardholder relies on the signed statement method indirectly (through the provider), ensure the provider retains the signed statements for at least five years after the supplier ceases association. The cardholder should request the provider to confirm that this retention is in place.

Step 5: Reimbursement transactions. For reimbursements under section 111-5, treat the corporate card statement for the underlying expense as satisfying the waiver conditions. Ensure the statement identifies the expense sufficiently. The cardholder must still have the policies under section 12 that cover reimbursed expenses.

Step 6: Monitor changes. If the corporate card provider changes, or if significant suppliers change their GST status, reassess whether the signed statement method remains accurate. The cardholder should periodically (e.g., annually) request from the provider a list of suppliers using signed statements and confirm that no material changes have occurred.

Step 7: Document the compliance approach. In the event of an audit, the cardholder should be able to demonstrate that all conditions in sections 7 and 12 were satisfied at the time each BAS was lodged. A compliance checklist for each tax period, cross-referencing the corporate card statement and the policies, is advisable.

By following these steps, the cardholder can rely on the waiver to reduce the burden of collecting adjustment notes, while managing the risks that arise from the alternative compliance framework.