Accruals basis. As the timing of payments and the issuing of documents should occur at roughly the same time, there should not be a material difference in relation to the timing of income and deductions for Growers whether they account on a cash or accruals basis. Additionally, whilst the GPA will be considered a ‘financial arrangement’ which would be dealt with under the TOFA provisions in Division 230 of the Income Tax Assessment Act 1997 (if applicable to the Grower), we again note this should not impact the tax implications of the timing of income and deductions for income tax purposes. As the actual income tax position of the Grower will depend on each Grower’s own circumstance and business structure, these comments are necessarily general in nature. Each Grower should seek their tax advice specific to their particular circumstances. However, we would expect the income tax treatment and associated timing would be largely consistent with respect to each of the above alternative scenarios.
Accruals basis. As the timing of payments and the issuing of documents should occur at roughly the same time, there should not be a material difference in relation to the timing of income and deductions for Growers whether they account on a cash or accruals basis. Additionally, whilst the GPA will be considered a ‘financial arrangement’ which would be dealt with under the TOFA provisions in Division 230 of the Income Tax Assessment Act 1997 (if applicable to the Grower), we again note this should not impact the tax implications of the timing of income and deductions for income tax purposes. As the actual income tax position of the Grower will depend on each Grower’s own circumstance and business structure, these comments are necessarily general in nature. Each Grower should seek their tax advice specific to their particular circumstances. However, we would expect the income tax treatment and associated timing would be largely consistent with respect to each of the above alternative scenarios. ACCOUNTING (As applicable for QSL payments from 1 July 2017 - 1 July 2021) Whilst Growers will have different accounting processes and use different accounting systems, suggested accounting entries for the reporting of transactions by the Growers are outlined below. We have provided 2 examples for your consideration: The first is based on the simple example outlined above; The second is more detailed, and includes examples of the documents that will be received from Wilmar and QSL. The above example has been continued below, setting out each of the transactions that are required to be reported by Growers. ATO $10 GST 2 - Net deductions $100 + $10 GST Grower
