20CGoods and services tax incurred in making certain supplies of financial services

1. Subject to this section, a registered person who has made an election under section 20F and who in respect of a taxable period supplies financial services to another supplier of financial services (called in this section a direct supplier) may make for each direct supplier a deduction under section 20(3)(h) of an amount given by the following formula:

   $a\; \times \; (b\; ÷\; c)\; \times \; (d\; ÷\; e)$

   Where:

   • a a

     is the total amount in respect of the taxable period that the registered person—

   • would not be able to deduct under section 20(3) in the absence of this section; and
   • would be able to deduct under section 20(3), other than under section 20(3)(h), if all supplies of financial services by the registered person were taxable supplies
   • b b

     is the total value of exempt supplies of financial services by the registered person to the direct supplier in respect of the taxable period

   • c c

     is the total value of exempt supplies of financial services by the registered person in respect of the taxable period

   • d d

     is the total value of taxable supplies by the direct supplier in respect of the taxable period, determined under section 20D

   • e e

     is the total value of supplies by the direct supplier in respect of the taxable period, determined under section 20D.