Private ruling: creditable acquisitions
Date of advice: 3 October 2025
Published: 17 November 2025
Ruling period: DD October 20YY to DD October 20YY
Date scheme commenced: DD November 20YY

Ruling: Q1: Is the Charitable Trust (Trust) carrying on an enterprise under section 9-20 of the A New Tax System (Goods and Services) Tax Act 1999 (GST Act)? | A1: Yes | Q2: Is the Trust required to be registered for GST under section 23-5 of the GST Act? | A2: No | Q3: Is theTrust eligible to be registered for GST under section 23-10 of the GST Act? | A3: Yes | Q4: If the Trust is registered (or required to be registered) for GST, are the Trustee Fees payable by the Trust to the Trustee for an acquisition, such that the Trust is making a: (a) creditable acquisition under section 11-5 of the GST Act; or (b) a reduced credit acquisition under section 70-5 of the GST Act? | A4: The Trust is making a creditable acquisition under section 11-5 of the GST Act. As the trust makes a creditable acquisition it is not necessary to consider whether the trust makes a reduced credit acquisition under section 70-5 of the GST Act. | Q5: If the Trust is registered (or required to be registered) for GST, is the Investment Management Fee payable by the Trust consideration for an acquisition, such that the Trust is making a: (a) creditable acquisition under section 11-5 of the GST Act; or (b) a reduced credit acquisition under section 70-5 of the GST Act? | A5: The Trust is making a creditable acquisition under section 11-5 of the GST Act. As the trust makes a creditable acquisition it is not necessary to consider whether the trust makes a reduced credit acquisition under section 70-5 of the GST Act. | Q6: If the Trust is registered (or required to be registered) for GST, is the Trust making a creditable acquisition under section 11-5 of the GST Act or a reduced credit acquisition under section 70-5 in respect of the following: (a) Legal Fees payable (b) Other Service Provider Fees (c) Executive Office Fees (d) Payment Charges payable (e) Program License Fee (f) Venue and Catering Payments (g) Travel and Accommodation Payments (h) Printing and Stationary Payments (i) Accounting Fees (j) Audit Fees (k) Card/Voucher Personal Expenditure Payments (l) Third Party Personal Expenditure Payments (m) Reimbursement Payments? | A6: Yes, the Trust makes a creditable acquisition under section 11-5 of the GST Act in respect of (a), (b), (c), (d) to the extent that GST is included in the price, (e), (f), (g), (h), (i) and (j). As the Trust makes a creditable acquisition it is not necessary to consider whether the Trust makes a reduced credit acquisition under section 70-5 of the GST Act. No, the Trust does not make a creditable acquisition under section 11-5 of the GST Act in respect of: • (d) to the extent that GST has not been included in the price, • (k), (l) and (m).

Relevant facts and circumstances: The Trust was established to hold, manage and distribute funds to its beneficiaries in accordance with its Trust Deed. The Trust is registered for GST and its GST turnover is less than $150,000. The Trust is registered as a charity with the Australian Charities and Not-for-Profits Commission (ACNC) and makes distributions for charitable purposes in accordance with its Trust Deed. The Trust receives payments from a third-party entity which forms part of the trust fund. Payments received by the Trust (such as the payments from the third-party entity) are invested by the Trust and the investment-related income is generally used to pay trust expenses. The Trust does not exceed the Financial Acquisitions Threshold (FAT). The Trust pays the Trustee a Trustee Fee for services rendered relating to running activities of the Trust. The Trust also incurs an Investment Management Fee in relation to its investment activities. In operating the Trust, the Trust pays: • Legal Fees for advice in relation to administering the Trust • minute taking services (Other Service Provider Fees) for note taking during Trust meetings • Executive Office Fees to assist with day-to-day administration and trust distributions • Payment Charges for debit cards purchased • Program License Fee that assists with making trust distributions • Venue and Catering Payments, Travel and Accommodation Payments and Printing and Stationary Payments to cover attendance and materials required to hold trust meetings. • Accounting Fees for the preparation of budgets and statements • Audit Fees for auditing services • Card/Voucher Personal Expenditure Payments, Third Party Personal Expenditure Payments and Reimbursement Payments relating to beneficiary purchases after trust distributions have been made.

Relevant legislative provisions: A New Tax System (Goods and Services) Tax Act 1999 section 9-20 | A New Tax System (Goods and Services) Tax Act 1999 section 11-5 | A New Tax System (Goods and Services) Tax Act 1999 section 11-15 | A New Tax System (Goods and Services) Tax Act 1999 section 23-5 | A New Tax System (Goods and Services) Tax Act 1999 section 23-10

Reasons for decision: Summary: Yes. The Trust is carrying on an enterprise. | Detailed Reasoning - Detailed reasoning: Section 9-20 of the GST Act states: (1) An enterprise is an activity, or series of activities, done: (a) in the form of a *business; or (b) in the form of an adventure or concern in the nature of trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or ... (e) by a charity; or ... (* denotes a term defined in section 195-1 of the GST Act). The Trust is registered as a charity with the ACNC and makes distributions for 'Charitable Purposes' in accordance with the Trust Deed and therefore meets the definition in paragraph 9-20(1)(e) of the GST Act. Consequently, the Trust is carrying on an enterprise under section 9-20 of the GST Act. | Detailed Reasoning - Question 2: Is the Trust required to be registered for GST under section 23-5 of the GST Act? | Summary: No. The Trust is not required to be registered for GST. | Detailed Reasoning - Detailed reasoning: Section 23-5 of the GST Act states: You are required to be registered under this Act if: (a) you are *carrying on an *enterprise; and (b) your *GST turnover meets the *registration turnover threshold. As outlined in Question 1, the Charitable Trust is carrying on an enterprise pursuant to section 9-20 of the GST Act. On this basis paragraph 23-5(a) is satisfied. The meaning of registration turnover threshold for a non-profit body is provided in subsection 23-15(2) of the GST Act. Currently, the registration turnover threshold for non-profit bodies is specified as an amount of $150,000. Section 188-10 of the GST Act states: (1) You have a GST turnover that meets a particular *turnover threshold if: (a) your *current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your *projected GST turnover is below the turnover threshold; or (b) your projected GST turnover is at or above the turnover threshold. Your 'current GST turnover' is defined in section 188-15 of the GST Act as the sum of the values of all of your supplies made in a particular month and the preceding 11 months. Your 'projected GST turnover' is defined in section 188-20 of the GST Act as the sum of the values of all of your supplies made in a particular month and the following 11 months. Paragraphs 188-15(1)(a) and 188-20(1)(a) of the GST Act provide that input taxed supplies are not taken into account when calculating your current and projected turnovers respectively. In the case of the Trust, the following amounts are excluded from the calculation of your GST Turnover. • Payments from the third party, as these are not consideration for any supply by the Trust. • Amounts received from the sale of shares, as these are an input taxed supply. • dividend and interest income. Upon disregarding the abovementioned revenues, the Trust does not meet the registration turnover threshold and is unlikely to meet the registration turnover threshold in the future. Based on this, the Trust is not required to be registered for GST under section 23-5 of the GST Act. | Detailed Reasoning - Question 3: If the answer to Question 2 is 'No', can the Trust elect to be registered for GST under section 23-10 of the GST Act? | Summary: Yes. The Trust may elect to register for GST under section 23-10 of the GST Act. | Detailed Reasoning - Detailed reasoning: Section 23-10 of the GST Act states: (1) You may be *registered under this Act if you are carrying on an *enterprise (whether or not your *GST turnover is at, above or below the *registration turnover threshold). (2) You may be *registered under this Act if you intend to carry on an *enterprise from a particular date. As outlined in Question 1 and Question 2, the Trust is carrying on an enterprise and its GST turnover is below the registration turnover threshold. As the Trust is carrying on enterprise, they satisfy subsection 23-10(1) of the GST Act and may elect to be registered for GST. | Detailed Reasoning - Question 4: Is the Trustee Fees payable by the Trust to xxx consideration for an acquisition, such that the Charitable Trust is making a: (a) creditable acquisition under section 11-5 of the GST Act; or (b) a reduced credit acquisition under section 70-5 of the GST Act? | Summary: Yes. The Trustee Fees payable by the Trust are consideration for a creditable acquisition under section 11-5 of the GST Act. On this basis, a response to question 4(b) in not necessary. | Detailed Reasoning - Detailed reasoning: Section 11-5 of the GST Act states: You make a creditable acquisition if: (a) you acquire anything solely or partly for a *creditable purpose; and (b) the supply of the thing to you is a *taxable supply; and (c) you provide, or are liable to provide, *consideration for the supply; and (d) you are *registered, or *required to be registered. Paragraphs 11(b),11-5(c) and 11-5(d) of the GST Act are satisfied as the payment of the Trustee Fees by the Charitable Trust was for a taxable supply made to them, they provided or are liable to provide consideration and they are registered for GST. What remains to be determined is whether under paragraph 11-5(a) of the GST Act the acquisition by the Charitable Trust is made for a creditable purpose. Creditable purpose Section 11-15 of the GST Act states: (1) You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on you *enterprise. (2) However, you do not acquire the thing for a creditable purpose to the extent that: (a) the acquisition relates to making supplies that would be *input taxed; or (b) the acquisition is of a private or domestic nature. ... (4) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if: (a) the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and (b) you do not *exceed the financial acquisitions threshold. ... As a rule, you cannot claim input tax credits on acquisitions related to making input taxed financial supplies as the acquisitions are not for a creditable purpose. An exception applies when an entity does not exceed the financial acquisition threshold (FAT). In such cases, an entity is entitled to claim full input tax credits for acquisitions related to making input taxed financial supplies. This ensures that most entities are not denied input tax credits for making financial supplies that are not part of their principal activities. Hence, if you do not exceed the FAT, you will be entitled to full input tax credits for your acquisitions. Where an acquisition is not made for a creditable purpose division 70-5 of the GST Act will allow a reduced input tax credit for certain types of services acquired. These are called "reduced credit acquisitions" and are generally 75% of the input tax credit. Where an acquisition is made solely for a creditable purpose, the need to consider whether an acquisition is a reduced credit acquisition is not needed as full entitlement to a credit will arise. The Trust acquires services from xxx and pays the Trustee Fees. The services acquired are made for the purpose of carrying on the Trusts enterprise as a charity, which includes the making of input taxed supplies and non-input taxed supplies. Under subsection 11-15(4) of the GST Act an acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be input taxed if the only reason it would (apart from this subsection) be so treated is because it relates to making financial supplies; and you do not exceed the FAT. In this case the Trust does not exceed the FAT and subsection 11-15(4) of the GST Act is met. Therefore, the Trust's payment of Trustee Fees is not treated as consideration relating to the making of supplies that would be input taxed under paragraph 11-15(2)(a) of the GST Act. On this basis paragraph 11-5(a) of the GST Act is satisfied and the services acquired (for which the Trustee Fee is payable) are a creditable acquisition under section 11-5 of the GST Act. | Detailed Reasoning - Question 5: Is the Investment Management Fee payable by the Trust to xxx consideration for an acquisition, such that the Trust is making a: (a) creditable acquisition under section 11-5 of the GST Act; or (b) a reduced credit acquisition under section 70-5 of the GST Act? | Summary: Yes. The Investment Management Fees payable by the Trust is consideration for a creditable acquisition the Trust makes under section 11-5 of the GST Act. On this basis, a response to question 5(b) in not necessary. | Detailed Reasoning - Detailed reasoning: For the same reasons as outlined in Question 4, the Trust makes a creditable acquisition when it acquires the services for which the Investment Management Fee is paid. | Detailed Reasoning - Question 6: Is the Trust making a creditable acquisition under section 11-5 of the GST Act or a reduced credit acquisition under section 70-5 in respect of the following: (a) Legal Fees payable (b) Other Service Provider Fees (c) Executive Office Fees (d) Payment Charges payable (e) Program License Fee (f) Venue and Catering Payments (g) Travel and Accommodation Payments (h) Printing and Stationary Payments (i) Accounting Fees (j) Audit Fees (k) Card/Voucher Personal Expenditure Payments (l) Third Party Personal Expenditure Payments (m) Reimbursement Payments? | Summary: For question 6: • (a), (b), (c), (e), (f), (g), (h), (i) and (j) the Trust is making a creditable acquisition; • (d) the Trust is making a creditable acquisition to the extent GST is included in the price; • (k), (l) and (m) the Trust is not making a creditable acquisition. | Detailed Reasoning - Detailed reasoning: For the same reasons as outlined in Question 4, the Trust makes a creditable acquisition when it pays the following fees for services provided: • Legal Fees payable, • Other Service Provider Fees, • Payment Charges payable (which are subject to GST) • Program License Fee, • Venue and Catering Payments, • Travel and Accommodation Payments, • Printing and Stationary Payments, • Accounting Fees and • Audit Fees. The Trust does not make a creditable acquisition in respect of the Card/Voucher Personal Expenditure Payments, Third Party Personal Expenditure Payments and Reimbursement Payments for the following reasons. For an entity to make a creditable acquisition under section 11-5 of the GST Act it must make an acquisition. Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) examines the meaning of 'supply' in the GST Act and also discusses the meaning of acquisition. In particular paragraphs 53, 54 and 56 state: 53. The meaning of 'acquisition' in section 11-10 is the corollary of the meaning of supply in section 9-10. Subsection 11-10(1) provides that, 'An acquisition is any form of acquisition whatsoever'. Subsection 11-10(2) refers to the thing acquired, such as goods, services or a right, and the means by which the thing is acquired, such as its receipt or acceptance. 54. To make an acquisition you have to be the 'recipient' of the supply of the thing you are acquiring. Although the term 'recipient' does not appear in Division 11, it is defined in section 195-1 to mean the entity to which the supply was made. This definition suggests that there is a supplier, a recipient and that something is passed from the supplier to the recipient. Creditable acquisitions and input tax credits 56. If you make an acquisition and the other requirements of section 11-5 are met then the acquisition is a creditable acquisition. However, if you are not the recipient of the supply you will not have made acreditable acquisition, even if you provide consideration for the supply. In this case when the Trust pays the: • Card/Voucher Personal Expenditure Payments, it issues (or can upload further money to) pre-paid debit cards which are used by Beneficiaries to pay for goods and services the Beneficiary acquires. • Third Party Personal Expenditure Payments, the Trust is paying a third party (the supplier), for acquisitions made by the Beneficiary. • Reimbursement Payments, the Trust is paying to Beneficiary for acquisitions made by the Beneficiary. Consistent with the view in GSTR 2006/9, in each of the above case the Trust is not the acquirer of any supply. As such the Trust is not making a creditable acquisition under section 11-5 of the GST Act.