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Free beer for Aussies!

VB have decided they’re going to give a free beer to every adult in Australia if that country wins the next Ashes cricket series against England.

More details here.

The problem for the Government with these sorts of giveaways is they don’t get any GST – that is if the businesses concerned get it right. But not all do.

What VB say they’ll do is put vouchers in local newspapers which people can then redeem for their beer. The retail value of all the vouchers is about $NZ25m which means about $2.3m of GST in Australia the Government will miss out on.

The GST rules for vouchers are complicated in any country. The potential problem arises where businesses are set up to account for GST when vouchers are redeemed. If the voucher was given away in the first place there’s a risk someone (maybe a retailer) will account for GST when there really shouldn’t have been any.

Now I’m sure a big outfit like VB will be completely on top of this stuff and the $2.3m of virtual GST won’t find its way to the Australian Tax Office.

Nevertheless, it’s a timely reminder of the complexities around these sorts of promotions, albeit a thirst quenching one. Must go…………

Iain

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