Private ruling: GST and charity activities
Date of advice: 13 November 2017
Published: April 2018

Ruling: Q1: Are you liable for GST in relation to your minister conducting weddings and/or funerals for a fee? | A1: No, you are not liable for GST as you, being the entity providing the services (through your minister who is your employee), are an ACNC-registered religious institution and you are supplying services integral to the practice of your religion. | Q2: Are you liable for GST on the fees you charge for hiring your buildings to various groups and individuals who are not connected with you? | A2: Yes, you are liable for GST as the supplies made by you meet all of the requirements of a taxable supply and they are neither GST-free supplies nor input taxed supplies. | Q3: Are you liable for GST in relation to the supplies you make when allowing people connected with you to use your services for free? | A3: No, you are not liable for GST as the supplies you are making are not taxable supplies as you do not receive any consideration in relation to the supplies. | Q4: Are you liable for GST on the donations you occasionally receive from people connected with you? | A4: No, you are not liable for GST on the donations as you do not make any supplies in return for the donations and the donations are genuine gifts to you.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Background facts ● You are registered for Goods and Services Tax (GST). ● You are an ACNC-registered religious institution and an endorsed charity as defined in section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). ● You have not provided us with the information that we requested in order for us to be able to determine whether you meet all of the requirements of section 38-250 of the GST Act (supplies made for nominal consideration). Minister’s Services ● Your minister conducts weddings and/or funerals as part of his employment with you; these services being integral to the practice of your religion. Services you offer ● Your buildings (located in Australia) are able to be used by different groups and members of the public, as well as by people connected with you. ● Your minister provides services to various groups and individuals in addition to people connected with you. Donations ● You occasionally receive donations from people connected with you. ● Although the donors may have been the recipient of your services, the donations are not made to you in return for the provision of your services. ● You do not require or expect any payment for your services, and the donations are not reimbursements for your services. ● The donations do not relate to any contractual obligation.


Reasons for decision: Summary: Asterisked terms are defined in section 195-1 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Detailed Reasoning - Activities of an employee: Paragraph 9-20(2)(a) of the GST Act provides that an enterprise does not include an activity, or series of activities, done by a person as an employee. Further, paragraph 333 of Miscellaneous Taxation Ruling 2006/1 (MT 2006/1) states as follows: An individual who performs activities as an employee is not carrying on an enterprise in relation to those activities. The activities undertaken are the activities of the entity to which that individual provides work or services. This is made clear by the note to paragraph 9-20(2)(a) of the GST Act. However, an individual who is an employee may operate a separate enterprise and be entitled to an ABN in respect of that enterprise. Thus, paragraph 333 of MT 2006/1 confirms that the activities your minister performs as your employee are in fact your activities; meaning that you are the entity making the supplies. The question then becomes whether you are liable for GST on the supplies. | Detailed Reasoning - Taxable Supply: Section 9-40 of the GST Act provides that you must pay the GST payable on any taxable supply that you make. Section 9-5 of the GST Act states as follows in relation to what is a taxable supply: 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. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. The provisions relating to input taxed supplies do not apply to you but the GST-free provisions do. | Detailed Reasoning - GST-free religious services: Section 38-220 of the GST Act states as follows in relation to religious services: A supply is GST-free if it is a supply of service that: (a) is supplied by a *ACNC-registered religious institution; and (b) is integral to the practice of that religion. ATO Interpretative Decision 2004/438 (ATO ID 2004/438) explains the ATO view on the GST treatment of the supply of a religious pastoral ministry course. The determination also however provides examples of religious services as follows: Examples of services include religious services provided at ceremonies such as weddings, baptisms or funerals that are conducted in accordance with the canons of conduct for the members of that religious institution. You meet the first requirement of section 38-220 of the GST Act as you are an ACNC-registered religious institution. You also meet the second requirement of section 38-220 of the GST Act as your minister’s services of facilitating weddings and funerals are integral to the practice of your religion. The services you supply through your minister are thus GST-free supplies of religious services under section 38-220 of the GST Act. You are not liable for GST on the fees you charge for these services. | Detailed Reasoning - Hiring buildings for a fee: When you hire your buildings for a fee to various groups and individuals who are not connected with you, you meet all of the requirements for a taxable supply (as defined above). Firstly, as you charge fees, you make the supplies for consideration. Secondly, as you are a charity, you make the supplies in the course or furtherance of an enterprise that you carry on as paragraph 9-20(1)(e) of the GST Act provides that an enterprise includes an activity, or series of activities, done by a charity. Thirdly, the supplies are connected with the indirect tax zone (essentially Australia) as your buildings are attached to land in Australia (see subsection 9-25(4) of the GST Act). Fourthly, you are registered for GST. Further, none of the provisions in the GST Act relating to input taxed supplies or GST-free supplies apply. In particular, the abovementioned supplies are not GST-free under section 38-220 of the GST Act (religious services); nor are the abovementioned supplies GST-free under section 38-250 of the GST Act (supplies for nominal consideration). | Detailed Reasoning - Not GST-free under section 38-220: religious services: Unlike the conducting of weddings and/or funerals by your minister, the hiring of a building does not meet the definition of religious services as explained in ATO ID 2004/438. Therefore they are not GST-free supplies of religious services under section 38-220 of the GST Act. | Detailed Reasoning - Not GST-free under section 38-250: nominal consideration: Supplies can also be GST-free where they are supplies made for nominal consideration by an endorsed charity (see section 38-250 of the GST Act). However, you have been unable to provide us with the information that we requested in order for us to be able to determine whether you meet all of the requirements of section 38-250 of the GST. As a result, you are liable for GST on the fees you charge for hiring your buildings. | Detailed Reasoning - Providing services for free: In relation to your supplies of providing services to people connected with you for free, as you don’t charge anything for these supplies or receive anything in return, you do not meet the first requirement (paragraph (a)) for a taxable supply in section 9-5 of the GST Act. Therefore, as you are not making taxable supplies you are not liable for GST on such supplies. | Detailed Reasoning - Donations: Subsection 9-17(2) of the GST Act provides that making a gift to a non-profit body is not the provision of consideration for a supply. Donations can be a type of gift. For a payment to be considered a gift it must be unfettered , that is, there must be no obligations to do anything in recognition of the gift and no expectation on the part of the donor to receive anything in return for the gift. A payment will not be a gift where there is a contractual obligation on the part of the charity or non-profit organisation to use the funds in a specified way or the provision of a material benefit to the donor. A payment will not be a gift and will be consideration for a supply if the payment is in connection with, or in response to , or for the inducement of a supply. In your case, you are a non-profit body (being a charity) and sometimes receive donations from people connected with you. Based on the information you have provided, we are satisfied these donations are a genuine gift because: ● although the donors may have been the recipient of your services, the donations are not made to you in return for the provision of your services; nor are they reimbursements for your services ● the donations are unfettered, as you do not require or expect any payment, and ● the donations do not relate to any contractual obligation. Since the making of a genuine gift to a non-profit body is not the provision of consideration and you have not made any supplies in return for receiving the donations, you have not made any taxable supplies in connection with the donations. As such, you are not liable for GST on the donations you have received from people connected with you.