Private ruling: GST and supply of membership to Australian individuals
Date of advice: 6 December 2018
Published: March 2019

Ruling: Q1: If an overseas professional organisation poses the following three questions to Australian residents during its membership application process, can the professional organisation use the answers provided to determine whether or not its intangible membership supplies to those individuals are supplies to Australian consumers for the purposes of paragraph 9-25(5)(d), subsection 9-25(7) and section 84-100 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? (a) Is the professional membership acquired for the purposes of an enterprise, such as to enhance an employee's business skills, to keep qualifications current or to better serve clients? [Y/N] (b) Is the relevant enterprise which the professional member is working for GST-registered and if so, what is the ABN? [Y/N] ABN ……….. (c) Will the enterprise bear the cost of the membership (either by paying the membership directly or reimbursing the member)? [Y/N] | A1: No. The questions the overseas professional organisation intends to ask are mainly directed to employers and not to the individuals registering for the membership. The answers therefore will not assist the overseas professional organisation in determining whether the Australian individuals are Australian consumers when they register or renew their memberships. The Australian individuals become members of the professional organisation in order to be recognised for their qualification and to enjoy the benefits received for being a member of the professional organisation. Accordingly when the professional organisation supplies or renews the membership subscription of the Australian individuals it can ask the Australian individual acquiring the membership if they are registered for GST and to provide their ABN to determine whether the individual is an Australian consumer for GST purposes. Where the Australian individual advises the professional organisation that they are registered for GST and provides their ABN, the individual is not an Australian consumer for GST purposes. The supply of membership to them is not connected with Australia. Where the Australian individual advises the professional organisation that they are not registered for GST, the individual is an Australian consumer for GST purposes. The supply to them is connected with Australia and subject to GST where the professional organisation is required to be registered for GST or if the professional organisation chooses to register for GST. | Q2: When an Australian individual registers or renews for the professional organisation’s membership, will the supply of the professional organisation’s membership be made to an Australian consumer where a GST registered Australian business pays for the membership of the individual or agrees to refund the membership fee to the Australian individual and the invoice for the membership is issued under the name of the registered Australian individual? | A2: Generally an Australian individual who is an employee of a business in Australia does not have an ABN and is not registered for GST. When the employee acquires or renews their professional membership, the professional organisation’s supply of membership is to an Australian consumer in this instance. The supply is therefore connected with Australia irrespective of whether the employer pays for the membership fee or refunds the membership fee to the employee. When an employer decides to pay for the membership of their employee it is a benefit that the employer has decided to provide to the employee. In this situation an expense payment benefit arises when the payment is done. The employer will be able to claim back the GST paid on the taxable expense under Division 111 of the GST Act where the employer holds a tax invoice for the taxable expense. A tax invoice should include the ABN of the supplier and the amount of GST paid. Where a non-resident registers for the simplified GST they do not have an ABN and instead receive an ARN. In this instance they cannot issue a tax invoice.


Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-25 (5)(d) | A New Tax System (Goods and Services Tax) Act 1999 subsection 9-25(7) | A New Tax System (Goods and Services Tax) Act 1999 section 84-100


Relevant facts: The overseas professional organisation is a non-resident entity that does not carry on an enterprise in Australia. Currently, it is not registered for the Australian goods and services tax (GST). | The organisation provides memberships to individuals worldwide and its objective is to regulate the profession carried on by these individuals. Its role is to provide support services to its members | All membership subscriptions invoices are issued in the name of the individual member. It is the organisation’s policy that no subscription invoices be made out in the name of a company, partnerships or other bodies despite the latter having paid the membership subscription on behalf of the individual or refunded the membership subscription to the individual.