Private ruling: GST and Recipient Create tax invoices
Date of advice: 9 April 2019
Published: June 2019
Ruling period: 1 January 2019 – 31 December 2021
Date scheme commenced: 1 January 2019

Ruling: Q1: Is entity A (you) acting as an agent for the Contractor under the terms of the Facilitation Agreement when you collect and deposit fees generated by the Contractor into your bank account? | A1: Yes, you are acting as an agent for the Contractor when you collect and deposit fees generated by the Contractor in your bank account. | Q2: Can you issue a recipient created tax invoice (RCTI) to the Contractor? | A2: No. As you are not the recipient of any supply from the Contractor you are not able to issue a RCTI.

Relevant facts and circumstances: You, operate a medical facility out of business premises and are registered for GST. Health providers (Medical) provide their services to patients (the Clients) out of the business premises (Medical Facility). These specialists are not your employees and are all registered for GST personally or through their related entity. You enter into Facilities Agreements under which you provide your services to the Contractor. A representative copy of a Facilities Agreement has been provided as part of this ruling request. The parties to the Facilities Agreement are listed as: ● the “Company”, being a reference to you ● a “Specialist” being an individual employed or engaged by the Contractor to enable the Contractor to provide their services ● “Contractor’ being the entity listed on page 1 of the Facilities Agreement. Under the Facility Agreement the recitals state: A. The Company operates the Specialist Facility at the Business Place. B. The Contractor wishes to operate a Practice from the Business Place. C. The Contractor employs the Specialist to enable to Contractor to conduct the practice for the benefits of the Clients. D. The Company agrees to provide certain Facilities to the Contractor to enable the Contractor to conduct the Practice. E. … The services (Facilities) provided by you to the Contractor under the Facilities Agreement are listed as: ● Air conditioned offices, ● Photocopying, internet, telephone (except for any personal use which may be at the Contractors and/or Chiropractors expense), ● All equipment to conduct a Specialist business in line with current industry accepted standards for a chiropractic practice, ● Support staff for the office including reception (subject to agreed conditions), ● Technical assistance for the Specialist (subject to agreed conditions), ● Training and support staff, ● Marketing (the parties are to consult as to what marketing the Contractor and/or the Specialist will be provided with), ● Management and technical support to the Contractor and the Specialist, ● All business cards, ● Fee collection and Billing, ● Client file records and maintenance, ● All such other facilities as may be agreed between the parties from time to time. The Facilities Agreement provides that you are responsible to collect fees generated by the Business. The Fees collected will be remitted to the Contractor by the Mode of Payment at the Time of Payment. In consideration for the Facilities, the Contractor is to pay the Facilitation Fee to the Company. The Facilitation Fee is identified as ‘ 50% of the Professional Fees collected by the Company on behalf of the Contractor each week. ’ The Facilitation Agreement also provides that all fees generated by the Contractor are to be collected by the Company. The fees collected on behalf of the Contractor are deposited into an account operated by the Company or a related entity of the Company. Following a change in your computer systems you collect all fees and deposit them into a ‘clearing account’ in your name. Each week you calculate the Facilitation Fee owing to you and remit these funds to your operating account. The remaining funds in the ‘clearing account’ are remitted to the Contractor on a weekly basis. You do not provide any services to the Specialist or the Specialist’s Clients. The Specialist and/or Contractor do not provide any service to you. You would like to discharge the tax invoice requirements by issuing an RCTI to the Contractor.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 9-5 | A New Tax System (Goods and Services Tax) Act 1999 29-70