Decline in Turnover Test – the New Actual GST Decline in Turnover Test
The new actual GST decline in turnover test only applies with respect to the six-month extension of JKP (i.e., JobKeeper 2.0) and is broken up into two separate extension periods, as follows:
(a) Extension Period 1 – applies to JobKeeper fortnights that start on or after 28 September 2020 and end on or before 3 January 2021. The additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 30 September 2020, relative to its September 2019 quarter.
(b) Extension Period 2 – applies to JobKeeper fortnights that start on or after 4 January 2021 and end on or before 28 March 2021. The additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 31 December 2020, relative to its December 2019 quarter.
Effectively, this test will require a business to have had a decline in its actual GST turnover for the September 2020 and/or the December 2020 quarter (as applicable), relative to the actual GST turnover of its comparable quarter in 2019 (being September 2019 and December 2019 respectively), unless an alternative period is determined by the Commissioner.
For the new additional test, the applicable rate of decline in turnover required to qualify for the JKP in the extension periods is determined using the existing rules (i.e., 50% for entities with an aggregated turnover of more than $1 billion and 30% for entities with an aggregated turnover of $1 billion or less). This should be re-assessed when applying the new additional test as it may not be the same rate that was used in applying the original decline in turnover test (e.g., where there has been a substantial change in the entity’s turnover since the original test was applied).
If you would like to discuss this please contact our office.