The ATO has released a “guidance” which sets out what it sees as the key GST considerations for buy-now, pay-later providers. It focusses on assisting providers to determine their entitlement to input tax credits on related costs. The GST considerations for buy-now, pay-later providers (with no specific identifier) is intended to provide “practical guidance” and explain how the ATO assesses GST risk in this area.
This guidance considers what it describes as typical buy-now, pay-later arrangements. Depending on the facts, a buy-now, pay-later provider may generally make:
The ATO states that the apportionment methodology used “must reflect the objective intended use of acquisitions”. The methodology used must have regard to whether some of the acquisitions only relate to making input taxed supplies, or conversely only relate to making taxable supplies. It provides a table of common acquisitions and nexus to the supplies made by buy-now, pay-later providers. There are a number of worked examples.