Debt factoring agreements exemption (s.149) toolkit

Under section 149 of the Duties Act 2001, transfers of book debts are exempt if the transaction is part of a debt factoring agreement to provide finance to the transferor of the book debt. The purchaser is usually a finance company, bank or other financial institution.

The exemption will apply to transfers of book debts where:

• the transferor of the debts seeks finance from the transferee

and

• the debt factoring agreement is entered into by the parties as part of a finance arrangement.

The exemption does not apply where the nature of the transaction is one of sale and purchase, such as a transfer of book debts that is part of a business sale, or the purchase of book debts.

If you believe this exemption will apply to a transaction you are dealing with, as a registered self assessor you must assess and lodge it through QRO Online.

Assessing a section 149 exemption

Here are some tips to help you assess this type of transaction in QRO Online.

How to lodge online

You must complete all mandatory data fields under each tab in QRO Online. Mandatory fields are marked with a red asterisk. There are some specific data requirements.

• Answer Yes to the question: Is the consideration for this transaction less than the unencumbered value of the property included in this transaction?
• Enter the unencumbered value of 100% interest in property if known; if unknown, enter $0.00 (nil).
• Select Yes to the question: Is an exemption being claimed?
• Select s.149 exemption debt factoring agreements from the Exemption type drop-down list.

Records you need to keep

For this type of transaction, you must keep:

• copies of the documents
• evidence of the finance arrangement between the parties
• a completed dutiable transaction statement (Form D2.2).

Also consider…

• See the data entry standards for QRO Online.
• Read section 149(2) of the Duties Act for the definition of a ‘debt factoring agreement’.
• You can also read public ruling on debt factoring agreements (DA149.1) for more information.
• Use the transfer duty rates or transfer duty calculator to work out a duty liability.
• Get help with QRO Online.
• View the list of approved transactions for self assessors.