Private ruling: GST and supply of services
Date of advice: 3 March 2023
Published: 24 April 2023
Date scheme commenced: You are an entity based in Australia and you are registered for the goods and services tax (GST).

Ruling: Q1: Are you liable to pay GST under section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) on the supply of your services to clients located overseas, that are non-residents of Australia; do not operate in Australia; do not have representatives in Australia at the time of supply, and are not registered for GST? | A1: No.

Relevant facts and circumstances: You are an entity based in Australia and you are registered for the goods and services tax (GST). You operate a website (Platform) and offer your services to both clients in Australia (AU) and overseas. You have no representatives outside Australia. The Platform allows users to communicate with one another. The users must agree to the Terms of Use and Privacy Policies displayed on the website. The website is geo-sensitive. When a user of the Platform performs a search, they can only search in their Region - AU or overseas. As the website is geo-specific it recognises the local ISP, so results are specific to the country. You provide services to clients who are • based in Australia (including those registered for GST and unregistered); and • based overseas who are operating and registered overseas; are non-residents of Australia; do not operate in Australia; do not have representatives in Australia; and are not registered for GST. Your client must pay a specified fee to access your services online. The only service you provide to your client is access to the Platform. You are the sole owner or licensee of all intellectual property comprised in the Platform (including all intellectual property comprised in the Platform content). The Platform and its content are protected by copyright, trademarks, service marks, patents, design registrations, and other proprietary rights and laws. You do not supply any rights to the copyright or any other intellectual property rights in or related to the Platform or Platform content to your clients. This ruling is only in relation to the services that you provide to clients located overseas and are non-residents of Australia; and do not operate in Australia; do not have representatives in Australia; and are not registered or required to be registered for GST in Australia. You do not supply your services to any of your non-resident clients under an agreement that requires you to provide those services to a third-party in Australia. You have not entered into any agreement, whether directly or indirectly, with any of your non-resident clients, which requires that your services be provided to a third party in Australia.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1) | A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 section 38-190

Reasons for decision: Summary: Unless otherwise stated, all legislative references in this Ruling are to the GST Act. Where the term 'Australia' is used in this Ruling, it is referring to the 'indirect tax zone' as defined in subsection 195-1 of the GST Act. Subsection 7-1(1) provides that GST is payable on taxable supplies and section 9-40 provides that an entity must pay the GST payable on any taxable supply that it makes. You make a taxable supply if you meet the requirements of section 9-5. Section 9-5 provides that a supply is not a taxable supply to the extent that it is GST-free or input taxed. There are no provisions in the GST Act to make your supply to recipients in Australia GST-free or input taxed. Therefore, the supply of your services to recipients in Australia would be a taxable supply and you will be liable to pay the GST on those services. A supply is GST-free if it is GST-free under Division 38 or under a provision of another Act. Subdivision 38-E sets out when exports of goods and other supplies for consumption outside Australia are GST-free. Section 38-190 specifies when supplies of things, other than goods or real property, for consumption outside Australia are GST-free. Item 2 in the table in subsection 38-190(1) (Item 2) is relevant in your circumstance. Under Item 2, a supply of things other than goods or real property is GST-free if the supply is made to a non-resident who is not in Australia when the thing supplied is done and: (a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with *real property situated in Australia; or (b) the *non-resident acquires the thing in *carrying on the non-resident's *enterprise but is not *registered or *required to be registered. (*denotes a defined term in section 195-1 of the GST Act) Goods and Services Tax Ruling GSTR 2004/7 discusses when an entity is not in Australia when the thing supplied is done. This ruling is available on our website at www.ato.gov.au Where the provisions of either (a) or (b) above are met, the supply will be GST-free if the non-resident is not in Australia when the thing supplied is done. However, subsection 38-190(3) provides that a supply covered by Item 2 is not GST-free if it is made under an agreement entered into, whether directly or indirectly, with a non-resident, and the supply is provided, or the agreement requires it to be provided, to another entity in Australia. On the facts, subsection 38-190(3) does not exclude your supply from being a GST-free supply under Item 2. Therefore, your services to the non-resident clients would be GST-free under subsection 38-190(1). Where a supply is GST-free, no GST is payable on the supply.