Private ruling: GST and a supply of online dating services to Australian consumers
Published: September 2017

Ruling: Q1: Is the supply of online dating services by a non-resident entity (you) to the Australian consumers in Australia subject to goods and services tax (GST)? | A3: No, you are not required for GST in Australia as your GST annual turnover is less than $A75,000.

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. You are a non-resident entity which is based and operating overseas. You do not have Tax File Number (TFN) or an Australian Business Number (ABN) and you are not registered for GST in Australia. You have a website which is hosted and run overseas. The server is located overseas and is owned, managed and controlled overseas. You do not use any proxy or cache servers or any other servers in Australia. The website is available to Australian individuals who are charged in Australian dollars. The Australian consumers sign up to one of the dating websites online to meet each other in Australia. You charge a subscription fee to the Australian consumers who join the dating website. The subscription fee enables users to boost their profile by adding more pictures and it also allows them to contact other members. The subscribers receive access to profiles and like -minded single people. When the Australian consumers sign up to the dating website they have to agree to the terms and conditions on your website. The computer then automatically matches the people to other Australian consumers on the same platform. Subsequently they can meet up in person at a location of their choice, presumably in Australia. The online dating services are purely online application based process where the people sign up and look for profiles that interest them. There is no human interaction in the process. You do not personally match the people for the online dating. There is no matching that takes place apart from algorithms which suggest profiles to individuals. You stated that your estimated GST annual turnover from your supply of online dating services in Australia would be below AUS$75,000. You have no representatives in Australia in relation to your supply of online dating services. The online dating services are managed remotely from overseas. You do not provide any other services in Australia. You do not issue invoices to new customers, when a new customer subscribes they are sent a confirmation email.

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 9-25 | A New Tax System (Goods and Services Tax) Act 1999 Section 23-5

Reasons for decision: Detailed Reasoning - Taxable supply: GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if: a) The supplier makes the supply for consideration; and b) The supply is made in the course of an enterprise that it carries on; and c) The supply is connected with the indirect tax zone (Australia); and d) The supplier is registered or required to be register for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. Based on the facts given, your supply of online dating services satisfies paragraphs 9-5(a) and 9-5(b) of the GST Act as: You receive payments from the customers for your supply; The supply is made in the course of your enterprise (business) and Therefore, we need to consider whether your supply of online dating services is connected with Australia under paragraph 9-5(c) of the GST Act and whether you are required to register for GST under paragraph 9-5(d) of the GST Act. | Detailed Reasoning - Connected with Australia: The connection with Australia is one of the elements required to be satisfied before a supply is a taxable supply. For the purposes of determining whether the supply is connected with Australia, section 9-25 of the GST Act makes a distinction between a supply of goods, a supply of real property, and a supply of anything other than goods or real property. Thus, before addressing the issue of connected with Australia, it is necessary to determine the characteristics of the supply. | Detailed Reasoning - Prior 1 July 2017: Subsection 9-25(5) of the GST Act provides that a supply of anything other than goods or real property is connected with Australia if: (a) The thing is done in Australia; or (b) The supplier makes the supply through an enterprise that the supplier carries on in Australia; or (c) All the following apply: (i) neither paragraph (a) nor (b) applies in respect of the thing; (ii) the thing is a right or option to acquire another thing; (iii) the supply of the other thing would be connected with Australia. The supply of online dating services to the Australian consumer needs to satisfy only one of the paragraphs in subsection 9-25(5) of the GST Act for the supply to be connected with Australia. Under paragraph 9-25(5)(a) of the GST Act, the connection with Australia requires that the 'thing' being supplied is 'done' in Australia. The meaning of 'done' depends on the nature of the 'thing' being supplied. 'Done' can mean, for example, performed, executed, completed or finished depending on what is supplied. In your circumstance, the thing that is being supplied is the access to online dating services. You make the supplies to the Australian consumers via your website. The platform from which the online dating is accessed is located outside Australia. The Australian consumers gain access to online dating website by submitting their personal details via the internet, accepting the terms and conditions, and then access is granted to online dating services. Based on the information provided, the supply of access to online dating services by you to the Australian consumers is not done in Australia and therefore the supply is not connected with Australia under paragraph 9-25(5)(a) of the GST Act. If a supply of a thing is not connected with Australia because the thing is not done in Australia, the supply is connected with Australia if, under paragraph 9-25(5)(b) of the GST Act, the supplier makes the supply through an enterprise that the supplier carries on in Australia. From the facts given, you are the supplier of the online dating services to the Australian consumers in Australia. You make supplies through your website from overseas. You are a company that is incorporated and based overseas and do not conduct your business in Australia nor carry on business through a representative in Australia. Therefore, based on these facts, it is considered that you are not making the supply of access to online dating services through an enterprise that you carry on in Australia under paragraph 9-25(5)(b) of the GST Act. The supply is also not connected with Australia under paragraph 9-25(5)(c) of the GST Act. This is because these are no supplies of rights or options to acquire other things where the supply of the other things would be connected with Australia. Accordingly, you have not met the requirement in paragraph 9-5(c) of the GST Act and the supply of online dating services by you to the Australian consumers will not be connected with Australia up to the tax period 30 June 2017. | Detailed Reasoning - From 1 July 2017: From 1 July 2017 a new paragraph 9-25(5)(d) will apply to subsection 9-25(5) of the GST Act. Under paragraph (d) in subsection 9-25(5) of the GST Act, a supply of anything other than goods or real property is connected with Australia if the recipient of the supply is an Australian consumer. Under subsection 9-25(7) of the GST Act, to be an 'Australian consumer' of a supply, an entity must: Be an Australian resident for income tax purposes (excluding residents of external Territories), and Either: Is not registered for GST, or If the entity is registered for GST, the entity did not acquire the thing solely or partly for their enterprise. Based on the information provided, you provide your online dating services to Australian consumers in Australia. The Australian consumers acquire your supply of online dating services for private purpose and do not acquire your online dating services for their enterprise. Therefore, your supply of online dating services to the Australian consumers satisfies subsection 9-25(7) of the GST Act. Accordingly, your supply of online dating services to the Australian consumers in Australia will be connected with Australia under paragraph 9-25(5)(d) of the GST Act from 1 July 2017. | Detailed Reasoning - GST registration: Under section 23-5 of the GST Act, an entity is required to be registered for GST if: The entity carries on an enterprise; and The entity's GST turnover (current and/or projected) meets the GST registration turnover threshold (currently $A75,000 and $A150,000 for non-profit organisation). The entity can choose to register for GST if its GST turnover is less than $A75, 000. Goods and Services Tax Ruling GSTR 2001/7 (available at www.ato.gov.au) provides guidance on the meaning of GST turnover. The current annual turnover is the sum of the values of all supplies made in a particular month plus the previous 11 months. The projected annual turnover is the sum of the value of all supplies made in a particular month plus the next 11 months. The GST turnover is the business's gross income (not the profit) from supplies connected with Australia. | Detailed Reasoning - Prior to 1 July 2017: Based on the information provided, your annual GST turnover is less than $A75, 000. Therefore you are not required to be registered for GST. The supply is outside the scope of GST. | Detailed Reasoning - From 1 July 2017: From 1 July 2017 you need to be registered for GST if you: Are making at least one inbound intangible supply (online dating services); and Meet the registration turnover threshold of A$75,000. From the facts provided your supply of online dating services are to the Australian consumers in Australia and therefore are connected with Australia from 1 July 2017. However, you advised that your GST annual turnover from the supply of online dating services to the Australian consumers in Australia is less than $A75, 000 and therefore you are not required to be registered for GST. However, you can choose to register for GST. Form 1 July 2017, if your GST annual turnover from the supplies connected with Australia reaches $A75,000 or more, you will be required to be registered for GST. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.

Answer 1: The supply of online dating services by you to the Australian consumers in Australia is not subject to GST. | Issue 2: Is your supply of online dating services to the Australian consumers in Australia connected with Australia? | Answer 2: Prior to 1 July 2017, your supply of online dating services to the Australian consumers in Australia is not connected with Australia under section 9-25(5) of the GST Act. | From 1 July 2017, your supply of online dating services to the Australian consumers in Australia will be connected with Australia under paragraph (d) in subsection 9-25(5) of the GST Act. | Issue 3: Are you required to register for GST in Australia?