Private ruling: GST - Tripartite Arrangements
Date of advice: 27 February 2026
Published: 20 April 2026
Ruling period: DDMMYY - DDMMYY
Date scheme commenced: DDMMYY

Ruling: Q1: Is Entity X making a taxable supply to Entity Z under section 9-5 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act)? for administering the agreement, for which Entity X receives a fee? | A1: Yes. Entity X makes a taxable supply to Entity Z under section 9-5 of the GST Act through the creation of contractual rights and obligations upon entering into the agreement, and a further supply through the subsequent performance of those obligations through the provision of program. | Q2: Is Entity X making a taxable supply to Entity Z or to Persons Y under section 9-5 of the GST Act by providing the incentive payment to Persons Y under the agreement? | A2: No. The payment of the incentive payment to Persons Y is a disbursement payment made by Entity X on behalf of Entity Z with Entity X as their agent. The payment is not a supply by Entity X to either Entity Z or Persons Y. As a result the payment does not meet all or any of the requirements of a taxable supply under section 9-5 of the GST Act.

Relevant facts and circumstances: An agreement was entered into that relates to a government incentive scheme established by a Government Department (Entity Z) to strengthen the number of specialists in that workforce area by providing a one-off $X payment to these specialist workers (Person Y) commencing their first year of training in the relevant jurisdiction in YYYY. The scheme is funded to support approximately X trainees and is administered by the administrator (Entity X), being one of several organisations engaged to manage the program. Both Entity X and Entity Z are registered for GST. Applications are managed directly by Entity X, and incentive payments are made to the participants (Persons Y) once they commence in accredited training facilities within the jurisdiction. Entity X will be paid a fee for administrating the program on behalf of Entity Z, and will make the incentive payments to Persons Y on behalf of Entity Z.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-10 | A New Tax System (Goods and Services Tax) Act 1999 section 9-15 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: Yes. Entity X makes a taxable supply to Entity Z under section 9-5 of the GST Act through the creation of contractual rights and obligations upon entering into the agreement, and a further supply through the subsequent performance of those obligations through the provision of program. | Detailed Reasoning - Taxable supply: The requirements of a taxable supply are set out in section 9-5 of the GST Act, which states: | Detailed Reasoning - Taxable supplies: You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with indirect tax zone; and (d) you are *registered or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (*Denotes a term defined in section 195-1 of the GST Act) All the above requirements must be met for a supply that you make to be a taxable supply. To satisfy the first requirement in section 9-5 of the GST Act, Entity X must first make a supply for which payment is consideration. The agreement between Entity X and Entity Z requires that Entity X is obligated to provide program administration for Entity Z. The agreement lists various obligations on both parties. | Detailed Reasoning - Supply: We need to determine whether the obligations and activities under the agreement constitute a supply within the meaning of section 9-10 of the GST Act: | Detailed Reasoning - Meaning of supply: (1) A supplyis any form of supply whatsoever. (2) Without limiting subsection (1), supply includes any of these: (a) a supply of goods; (b) a supply of services; (c) a provision of advice or information; (d) a grant, assignment or surrender of * real property; (e) a creation, grant, transfer, assignment or surrender of any right; (f) a * financial supply; (g) an entry into, or release from, an obligation: (i) to do anything; or (ii) to refrain from an act; or (iii) to tolerate an act or situation; (h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g). In Goods and Services Tax Ruling GSTR 2006/9 - Goods and services tax: supplies (GSTR 2006/9) provides guidance on what a supply is at paragraph 38 and 39 demonstrating the breadth of the meaning of a supply: | Detailed Reasoning - A 'thing': 38. As well as the supply examples listed in subsection 9-10(2), the GST Act recognises the concept of a 'thing'. 'Thing' is defined in section 195-1 as: thing means anything that can be supplied or imported. 39. 'Thing' is used to refer to goods, services or other matters that are the subject of supplies covered by section 9-10. For example, paragraph 11-5(b) uses the words: 'the supply of a thing to you is a taxable supply'. The use of the term 'thing' gives further emphasis to the breadth of the meaning of supply. Paragraph 73 of GSTR 2006/9 explains that two supplies are made within contractual agreements: 73. The High Court noted that a transaction which involves a supplier entering into and performing an executory contract will in general involve the supplier making at least two supplies. The first being creation of contractual rights and obligations at the time of entry into the contract and secondly, a supply by means of contractual performance of the obligation. [...] In Entity X's case, by entering into the agreement it first makes a supply through the creation of contractual rights and obligations. Entity X then makes a further supply by performing those obligations - namely, providing the program administration services. This is demonstrated by the key terms of the agreement; Entity X is obligated to administer the program in accordance with its parameters and to provide Entity Z with various other actions under obligation. On this basis, it is clear that Entity X makes supplies within the meaning of subsection 9-10(1) & subsections 9-10(2)(b) & (g) of the GST Act. | Detailed Reasoning - Consideration: For the supplies Entity X makes to be considered taxable supplies the supplies must be for consideration. Section 9-15 of the GST Act provides: | Detailed Reasoning - Consideration: (1) Consideration includes: (a) any payment, or any act or forbearance, in connection with a supply of anything; and (b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything. [...] Section 9-15 of the GST Act provides that a payment will be consideration for a supply if the payment is in connection with a supply and in response to or for the inducement of a supply. The requirement in subsection 9-5(a) of the GST Act states that the supply is for consideration means that not every connection will be sufficient. There must be a sufficient nexus between a particular supply and a particular payment which is provided for that supply for there to be a supply for consideration as detailed in the Commissioner of Taxation v. MBI Properties Pty Ltd [2014] HCA 49 at [35]. As previously stated, under the agreement Entity X entered into an obligation to administrator the program for Entity Z, Entity X provides the services as required, and in response to that Entity X receives a fee payment as consideration. | Detailed Reasoning - Conclusion: Entity X makes supplies for consideration in satisfaction of subsection 9-5(a) of the GST Act. As noted in the relevant facts above, Entity X is registered for GST and therefore carrying on an enterprise, satisfying subsection 9-5(b) of the GST Act. Entity X is providing the service in Australia (the indirect tax zone) satisfying subsection 9-5(c) of the GST Act, and lastly, as we have already determined, Entity X is registered for GST thereby satisfying the last element subsection 9-5(d) of the GST Act. As Entity X satisfies all elements of section 9-5 of the GST Act, Entity X is making a taxable supply of administration services under the agreement with Entity Z. | Detailed Reasoning - Question 2: Is Entity X making a taxable supply to Entity Z or to Persons Y under section 9-5 of the GST Act by providing the incentive payment to Persons Y under the agreement? | Summary: No. The payment of the incentive payment to Persons Y is a disbursement payment made by Entity X on behalf of Entity Z with Entity X as their agent. The payment is not a supply by Entity X to either Entity Z or Persons Y. As a result the payment does not meet all or any of the requirements of a taxable supply under section 9-5 of the GST Act. | Detailed Reasoning - Taxable supply: As discussed in response to question 1, in order for a supply to be considered a taxable supply it needs to meet all four elements of section 9-5 of the GST Act. Namely, the supply is made for consideration, the supply is made in the furtherance of an enterprise, the supply is within Australian territory, and finally you are required or are registered for GST. If one element of section 9-5 is not satisfied, the supply is not considered a taxable supply. | Detailed Reasoning - Agency: Under Entity X's agreement with Entity Z, which by definition is a tripartite relationship, Entity X is required to distribute funding supplied to Entity X by Entity Z as incentive payments to Persons Y as detailed in the agreement. The Goods and Services Tax Ruling GSTR 2000/37 - Goods and Services Tax : agency relationships and the application of the law (GSTR 2000/37) describes this tripartite relationship as an agency relationship at paragraph 10: | Detailed Reasoning - General law and agency relationships: 10. An entity may be authorised by another party to do something on that party's behalf. Generally, the authorised entity is called an agent. The party who authorises the agent to act on their behalf is called the principal. [..] Entity X makes the incentive payments to Persons Y because Entity Z has appointed Entity X as a program administrator responsible for delivering the program on its behalf, consistent with the agency principles outlined in GSTR 2000/37. Under the program, the funding is provided by the Government as set out in the agreement. Entity X does not provide the funding itself; rather, Entity X distributes the funding as incentive payments to Persons Y on Entity Z's behalf, acting as Entity Z's agent and under Entity Z's express authority as set out in the agreement. GSTR 2000/37 provides further guidance on the relationship between a principle and their agent at paragraphs 48 and 49 with respect to disbursements: | Detailed Reasoning - Agency relationship and disbursements: 48. Agents may incur expenses on a client matter both as an agent of the client and as a principal in the ordinary course of providing their services to the client. For example, in most cases, even though agreements between solicitors and clients may not use the term agent or agency, it is clear that the clients have authorised the solicitors to act on their behalf in the particular matter. When the solicitor acts as an agent for the client, the general law of agency applies so that the solicitor is 'standing in the shoes' of the client. 49. If a disbursement is made by a solicitor and incurred in the solicitor's capacity as a paying agent for a particular client, then no GST is payable by the solicitor on the subsequent reimbursement by the client. This is because the goods or services to which the disbursement relates are supplied to the client, not to the solicitor, by a third party. Also, the reimbursement forms no part of the consideration payable by the client for the supply of services by the solicitor. In this context, Entity X stands in the shoes of Entity Z when Entity X disburses the incentive payment to Persons Y. Although the term agent is not expressly used in the agreement, Entity Z has authorised Entity X under the agreement to make these payments on its behalf, which is sufficient to establish an agency relationship for GST purposes. Paragraph 49 makes it clear that the funding provided to Entity X for making these incentive payments does not form part of the consideration payable by Entity Z for Entity X's supply of administration services (being the fee identified in Question 1). While the incentive payment funding is not technically a reimbursement of a disbursement, the same principle applies: the payment relates to Entity Z's obligations, not Entity X's, and Entity X disburses the funds solely in Entity X's capacity as Entity Z's agent. | Detailed Reasoning - Supply: We have established the agency arrangement whereby the payments made by Entity X are on behalf of Entity Z to the Person Y, however we have not determined if the payment is a supply by definition under section 9-10 of the GST Act. Supply as defined under subsection 9-10(4) of the GST Act states that money cannot be a supply unless it is provided for consideration for the supply of money. (4) However, supply does not include: (a) a supply of * money unless the money is provided as * consideration for a supply that is a supply of money or * digital currency; or [...] The term supply is broadly defined in subsection 9-10(1) of the GST Act to mean "any form of supply whatsoever." Subsection 9-10(4) provides that a supply does not include a supply of money (as defined in section 195-1) unless the money is provided as consideration for a supply that is itself a supply of money (that is, a money-for-money supply). This is not the case with respect to the incentive payments Entity X makes to Persons Y. In making those payments, Entity X is simply disbursing funds to a third party on behalf of Entity Z in fulfilment of Entity X's obligations under the agreement; Entity X is not making a supply under section 9-10 of the GST Act. As a result of not making a supply the further provisions of section 9-5 of the GST Act do not apply, resulting in the payments not being considered a taxable supply. For completeness, the act of disbursement by Entity X forms part of the service Entity X supplies to Entity Z under the agreement, as explained in Question 1, where Entity X receives the consideration for this supply in the form of the fee.