Private ruling: Supply of services to non-residents
Date of advice: 13 March 2019
Published: May 2019
Ruling period: 13 March 2019 -13 March 2024

Ruling: Q1: Is the supply of professional services by the entity to its international clients GST-free? | A1: Yes.

Relevant facts and circumstances: The entity is registered for GST. The entity provides counselling services to both Australian residents and international clients. All services are provided from a home office in Australia. The international clients receive counselling and advice via phone sessions and email follow-up in their country of origin. They pay for the services in Australian dollars via PayPal.

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: GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services tax) Act 1999 (GST Act) states: 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. (* denotes a term defined under section 195-1 of the GST Act) The entity supplies its services to its international clients for a fee. It makes the supply in the course of carrying on its enterprise. The supply is connected with the indirect tax zone as it makes the supply through an enterprise that it carries on in the indirect tax zone. The entity is registered for GST. All the requirements in paragraphs 9-5(a) to 9-5(d) of the GST Act are satisfied. Therefore, the entity’s supply of services to its international clients is a taxable supply unless the supply is GST-free or input taxed. There is no provision in the GST Act under which the entity’s supply of services to the international clients would be input taxed. Under subsection 38-190(1) of the GST Act certain supplies of things, other than goods or real property, for consumption outside the indirect tax zone are GST-free. Item 2 in the table in subsection 38-190(1) (item 2) provides that a supply that is made to a non-resident who is not in the indirect tax zone when the thing supplied is done is GST-free if: (a) the supply is neither a supply of work physically performed on goods situated in the indirect tax zone when the work is done nor a supply directly connected with real property situated in the indirect tax zone; 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. The entity’s supply of services to its international clients is a supply to a non-resident. As the international clients receive the entity’s services through phone sessions and email follow-up in their country of origin, they are not in the indirect tax zone when the thing that the entity supplies is done. The entity’s supply of its services is a neither a supply of work physically performed on goods situated in the indirect tax zone nor a supply directly connected with real property situated in the indirect tax zone. Accordingly, the entity’s supply of services to its in ternational clients is GST-free under paragraph (a) of item 2.