Private ruling: GST and supply to a non-resident
Date of advice: 25 July 2017
Published: November 2017

Ruling: Q1: Is the supply you made to the non-resident entity under the Agreement a GST-free supply under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? Advice We consider you make the following supplies under the Agreement with the non-resident entity: 1) A supply of rights when you allow the non-resident entity to use your registration number on its website and list the non-resident’s office, website and location under your registration number. The supply is GST-free under item 4 in the table in subsection 38-190(1) of the GST Act. 2) A supply of reviewing services when you review the non-resident entity’s files and/or submission of applications. The supply is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act; and 3) A supply of referral services when you refer applications to the non-resident entity. The supply is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act.


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

Reasons for decision: Summary: Note : Where the term 'Australia’ is used in this document, it is referring to the 'indirect tax zone’ as defined in section 195-1 of the GST Act. We consider you make the following supplies to the Agent under the Agreement: 1) A supply of rights when you allow the non-resident entity to use your registration number on its website and list the non-resident entity’s office, website and location under your registration number. The supply is GST-free under item 4 in the table in subsection 38-190(1) of the GST Act. 2) A supply of reviewing services when you review the non-resident entity’s files and/or submission of applications. The supply is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act; and 3) A supply of referral services when you refer applications to the non-resident entity. The supply is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act. | Detailed Reasoning - Characterisation of supply: Under the Agent Agreement, you receive consideration for the following: 1) A fixed monthly salary for the use of your registration number by the non-resident entity and listing the non-resident entity’s office, website and location under your registration number. 2) An hourly fee for reviewing the non-resident entity’s files and/or submission of applications. 3) A commission fee for your referral of applications to the non-resident entity. We consider you make the following supplies under the Agreement: 1) A supply of rights when you allow the non-resident entity to use your registration number on its website and list the non-resident entity’s office, website and location under your registration number; 2) A supply of reviewing services when you reviewed the non-resident entity’s files and/or submission of applications; and 3) A supply of referral services when referred the applications to the non-resident entity. The next step is to determine the GST status of the supplies. | Detailed Reasoning - Taxable supply: GST is payable on a taxable supply. Under section 9-5 of the GST Act, an entity makes a taxable supply if: a) the supply is made for consideration; and b) the supply is made in the course or furtherance of an enterprise that the entity carries on; and c) the supply is connected with Australia; and d) the entity is registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. From the information received you satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act when you make any of the supplies as: a) you make the supplies for consideration; and b) you make the supplies in the course of a business that you carry on; c) the supplies are connected with Australia as they are made through a business that you carry on in Australia; and d) you are registered for GST. However, your supplies are not taxable supplies to the extent that they are GST-free or input taxed. There is no provision under the GST Act that makes the supplies input taxed. | Detailed Reasoning - GST-free supply: a) Supply of rights when you allow the non-resident entity to use your registration number. Relevant to this supply is item 4 in the table in subsection 38-190(1) of the GST Act (item 4). Under item 4 a supply that is made in relation to rights if: a) the rights are for use outside Australia; or b) the supply is to an entity that is not an Australian resident and it outside Australia when the thing supplied is done. When you allow the non-resident entity to use your registration number and list the non-resident entity’s office, website and location under your registration number, your supply of rights satisfies the requirement in item 4 as: ● the rights are for use outside Australia; and ● your supply of rights is made to a non-resident that is not in Australia when the supply is done. Your supply of rights to the non-resident entity is GST-free under item 4 to the extent that it is not negated by subsection 38-190(2) or 38-190(2A) of the GST Act. From the facts given, subsections 38-190(2) and 38-190(2A) do not apply to your supply. Your supply is therefore GST-free under item 4. ● Supply of reviewing services and supply of referral services Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if it is a supply that is made to a non-resident that 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 for GST. However, item 2 is limited by subsection 38-190(3) of the GST Act Subsection 38-190(3) of the GST Act provides that without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if: a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and b) the supply is provided or the agreement requires it to be provided to another entity in Australia; and c) for a supply other than an input taxed supply – none of the following applies: i. the other entity would be an Australian-based business recipient of the supply, if the supply had been made to it; ii. the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or iii. the other entity is an individual who is provided with the supply as an employee or officer of the recipient, and the recipient’s acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense. From the facts given your supply of reviewing and referral services made to the non-resident entity satisfy paragraph (a) of item 2 as: ● your supply of the services is made to a non-resident who is not in Australia in relation to your supply at the time of your supply; and ● your supply of the services 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. Further subsection 38-190(3) of the GST Act does not negate the GST-free status of the supply covered by item 2 as your supply of the services is made and provided to the Agent and not to another entity in Australia. Accordingly, your supply of reviewing and referral services to the non-resident entity is GST-free under item 2.

Relevant facts: You carry on a business in Australia and are registered for the goods and services tax (GST). | You have entered into an Agreement with a non-resident entity that has a website and does not carry on any business in Australia. The non-resident entity is not registered for GST and is not required to be registered for GST. | The advice you provide to the non-resident entity is related to the feasibility of the non-resident entity’s client qualifying to apply for an Australian visa. The non-resident entity’s client is a non-resident and is not in Australia. | There is no one in Australia involved when you make your supply to the non-resident entity. | The Agreement provides the following amongst other things: | ● You shall be responsible for the following: | ● List the non-resident’s office, its website and location under your registration number on the Australian Authority’s website. | ● Allow the non-resident company to operate and use your registration number with marketing and advertising purposes, on the website and direct conversations with potential clients. | ● You will be paid every month a fixed monthly salary monthly for the use of your registration number. | ● You will be paid an hourly rate for reviewing the non-resident entity’s files and /or submission of applications. | ● You agree to refer applications to the non-resident entity for a commission.