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Tax Office Tries To Place GST On Exports -

Thoroughbred Market Jeopardised

Thoroughbred Breeders have been horrified by a leaflet issued by the Australian Taxation Office stating that vendors of exported horses will have to pay GST if the horse has been broken in prior to leaving Australia. This contradicts a draft ruling, advice to the Australian Racing Board and previously worked out arrangements with the industry. Most Asian countries will not accept horses until they have matured and have been broken in. The reason for this is that the Asian countries do not have the area, the facilities nor the expertise to undertake breaking in. It has also been acknowledged previously by the ATO that it is extremely dangerous to fly unbroken horses. The practice of all counties exporting to these Asian countries is to let the yearlings mature and have them broken in.

In addition, the Australian Taxation Office is now seeking documents from the overseas purchasers of horses that have been exported up to 9 months ago and if not provided the vendor will be required to pay GST.

All these procedures have been now announced on a totally retrospective basis and contradict procedures agreed to with officers of the ATO prior to the Australian Easter Sale.

Directors of Thoroughbred Breeders Australia representing vendors throughout Australia and Directors of Aushorse Ltd representing Australia’s major commercial studs will be seeking urgent talks with the Treasurer and the Minister or Trade to resolve the matter. A recommendation will be made to the ATO that all genuine exports which can be independently verified in Australia and in the importing country and which leave Australia within 365 days of sale (unless there is a veterinary exemption or no transport) should be treated as GST free. This would apply to all horses sold prior to the 2002 Sydney Easter Yearling Sale. It is recommended, that from this sale onwards, the current procedure where no sale is GST free but where overseas buyers can have the GST refunded is continued.

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