Beware of artwork exemption!

We believe that the Sales Tax Manual as distributed by the Printing and Allied Trades Employee's Federation states that "Artwork is exempt from sales tax" and most printer, prepress houses and designers are interpreting this statement literally and merely showing the artwork component on the invoice as a separate amount.

To be exempt from sales tax on artwork, several conditions must be bet; namely:

  1. An Exemption Declaration by the customer, that the goods are exempt under Item 24 of the First Schedule to the Sales Tax (Exemptions and Classifications) Act 1992, must be obtained.
  2. There needs to be supporting evidence to show that there is a sale of artwork to the customer, for example, a clause that the artwork becomes the property of the person invoiced.

Should a sales tax audit be conducted on prepress houses or printers and these conditions have not been met then these companies would be liable for a retrospective adjustment for the last three years transactions

For further information on the above or any other taxation matters please call Beattie & Associates on 250 1669.

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