Private ruling: GST and supplies made by a non-resident
Date of advice: 23 May 2017
Published: September 2017

Ruling: Q1: Does GST apply to the supply of a membership subscription for which you receive annual membership fees from Australian resident members? | A1: No.

Relevant facts and circumstances: You are a non-resident entity. You provide annual membership subscription to entities worldwide including Australia. The membership subscription entitles members with access to research, decision support tools and education. Members are mainly companies, although some members are partnerships. Many entities have multiple memberships based on the individuals nominated by the entity to take up membership. You stated that you provide to your subscribers (members) the information via access from your website. Your website is maintained outside the indirect tax zone and you have no domain in the indirect tax zone. You also provide services to members that are done in the indirect tax zone by another entity on your behalf.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5, and | A New Tax System (Goods and Services Tax) Act 1999 subsection 9-25(5).

Reasons for decision: Summary: GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that 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. All the requirements in section 9-5 of the GST Act need to be satisfied for the supply of services to be a taxable supply. From the information received, you make the supply of services for consideration being the subscription amount and you make the supply in the course of an enterprise that you carry on. Paragraphs 9-5(a) and 9-5(b) of GST Act are therefore satisfied. Paragraph 9-5 (c) of the GST Act considers if 'the supply is connected with the indirect tax zone'. Under subsection 9-25(5) of the GST Act, a supply of anything other than goods or real property is connected with the indirect tax zone if: (a) the thing is done in the indirect tax zone; or (b) … Under paragraph 9-25(5)(a) of the GST Act we consider that the thing being supplied is a service the supply of that service is typically done where the service is performed. In your case, the supply of membership services (access to research, decision support tools and education) is made outside of the indirect tax zone. The services provided to your members on your behalf by an entity in the indirect tax zone would be connected with the indirect tax zone under subsection 9-25(5) of the GST Act. However, paragraph 93 of Goods and Services Tax Ruling GSTR 2000/31 provides that if the doing of one part of a thing may reasonably be regarded as merely incidental to the doing of another part of the supply, the incidental part is taken to be done where the part to which it is incidental is done. Therefore, in this circumstance we take the position that the services that the other entity makes to Entity A, under contract, are part of the services Entity A makes to their Australian members, are incidental to the doing of the other part of the supply under the subscription for a member in Australia. Accordingly, the supply under the membership subscriptions is not connected with the indirect tax zone and paragraph 9-25(5)(a) of the GST Act is not satisfied. Since your supply of the membership services is not connected with the indirect tax zone paragraph 9-5(c) of the GST Act is not satisfied and the supply is not taxable. Furthermore in relation to the GST registration requirements under paragraph 9-5(d) of the GST Act, you are currently not registered for GST. Also, as the supply of your membership services are not connected with Australia, this supply is excluded from the calculation of your GST turnover for GST registration purposes. Accordingly, your supply of membership services is not a taxable supply under section 9-5 of the GST Act. There is no need to consider whether your supply of services is GST-free or input taxed since GST is not applicable to the supply. As you are not registered for GST, the requirement under paragraph 9-5(d) of the GST Act would be met if you are registered or required to be registered for GST. You would be required to be registered for GST if your turnover from supplies that are currently not registered for GST. The supplies of your membership subscription are not connected with the indirect tax zone; thus, they are excluded from the calculation of your GST turnover for GST registration purposes.