GST cross-border services transactions and the connection with Australia

The federal government is currently considering proposals to simplify the design of the goods and services tax rules which regulate cross-border transactions. Among other measures, the proposed changes will limit the application of the "connected with Australia" provisions for supplies by a non-resident of services and intangibles. The proposal here is to shift the GST responsibility onto GST-registered entities with a presence in Australia with respect to the supply of services and intangibles made to them by non-residents who do not carry on an enterprise in Australia. In the author's view, the proposal is a simpler way of dealing with potential problems existing from the "connection with Australia" test and, if the reverse charge provisions of the GST law are revamped, it would provide a clearer understanding of how relevant entities should be charging GST on the supply of services and intangibles.