Private ruling: GST and Enterprise
Date of advice: 30 November 2017
Published: February 2018

Ruling: Q1: Whether the services you supply as part of your position on a board/committee are subject to GST? | A1: Yes.

Relevant facts and circumstances: ● You were an employee. ● You were asked to hold a position on a board that is located in the indirect tax zone. ● This position on the board was not connected to your employment. ● You did not receive remuneration for sitting fees because of your employment. ● Your role and responsibilities for the position on the board is at a high level and done in a recurrent or regular nature. They are also systematic and organised and carried out in a professional and business-like manner. ● When you left your employment, you became entitled to receive remuneration for your position on the board. ● These payments are not subject to any PAYG withholding. ● After you became entitled to receive remuneration, you commenced a different enterprise as a sole trader and registered for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) 1999 Section 9-5

Reasons for decision: Summary: GST is payable on any taxable supplies that you make. Section 9-5 provides 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 the indirect tax zone; and (d) you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. When you became registered for GST, the services you supplied in your position on the board satisfies the conditions for a taxable supply: ● the services were made for consideration or remuneration; ● the services were made in the course of an enterprise you carry on; ● the supply was made or connected with the “indirect tax zone”; and ● the services are not GST-free or input taxed supplies. As a sole trader, it did not matter that you registered for GST for another enterprise you carried on. When the conditions for section 9-5 are satisfied for any supply you make, the supply will be taxable and is subject to GST.