Private ruling: GST and supply of online video content
Date of advice: 18 March 2020
Published: May 2020

Ruling: Q1: Are you required to be registered for the goods and services tax (GST) under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes,you are required to be registered for GST under section 23-5 of the GST Act. | Q2: Is the supply of online video content you make to the non-resident business a GST-free supply under the GST Act? | A2: Yes,the supply of online video content you make to the non-resident business is a GST-free supply 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 23-5 | 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. | Detailed Reasoning - Question 1: Under Section 23-5 of the GST Act you are required to register for GST if you are carrying on an enterprise and the annual turnover of your business meets the GST registration threshold of A$75,000 or more. Goods and Services Tax Ruling GSTR 2001/7 (available at 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. Your supply of online video content is connected with Australia as the supply is made through a business that you carry on in Australia. You estimated your annual turnover would be above A$75,000. In this instance you are required to register for GST under section 23-5 of the GST Act since your annual turnover would be above the GST registration threshold of A$75,000. | Detailed Reasoning - Question 2: GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if: However the supply is not a taxable supply to the extent that it is GST-free or input taxed. All of the above must be satisfied for your supply of online video content to be a taxable supply. From the information given, your supply of online video content satisfies paragraphs (a) to (d) of section 9-5 of the GST Act as: a) you make your supply for consideration; and b) the supply is made in the course of a business that you carry on; and c) your supply is connected with Australia as it is made through a business that you carry on in Australia; and d) you are required to register for GST since your annual turnover is above A$75,000. However, your supply of online video content is not a taxable supply to the extent that it is GST-free or input taxed. There is no provision under the GST Act that makes your supply of online video content input taxed. GST-free supply Relevant to your supply of online video content is item 2 in the table in subsection 38-190(1) of GST Act (item 2). Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if the non-resident 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. Only one of the paragraphs in item 2 needs to be satisfied. Paragraph (a) of item 2 From the facts given, your supply of online video content satisfy paragraph (a) of item 2 as: · your supply of online video content is made to a non-resident business who is not in Australia in relation to your supply when the supply is done; and · your supply of online video content 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. However, paragraph (a) of item 2 is limited by subsection 38-190(3) of the GST Act. There is no need to consider paragraph (b) as paragraph (a) is satisfied. 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 Based on the information given subsection 38-190(3) of the GST Act does not apply to your supply as you are supplying and providing the online video content to the non-resident business. Your supply of online video content to the non-resident business is therefore GST-free under item 2

Relevant facts: You are an Australian resident and currently are not registered for GST. | You have an Australian business number (ABN) and perform your work under this ABN. Your work consists of making and supplying online video content to a non-resident business located outside Australia. You have provided us with a copy of the Services Agreement you have with the non-resident business. | The non-resident business will upload the video to the countries it chooses for online viewing. Customers can globally view the content by paying a fee to the non-resident business and logging on the non-resident hosted platform. | You do not know where the viewers are located when viewing your video. The non-resident business pays you for the provision of the online video content and the payment is dependent on how much money viewers pay County A business per video. | You estimate the annual income for your supplies would be above $75,000. | The non-resident business does not carry on any business activity in Australia and does not have any representative in Australia that is involved with your supply. | the supplier makes the supply for consideration; and | the supply is made in the course or furtherance of an enterprise that the supplier carries on; and | the supply is connected with Australia; and | the supplier is registered or required to be registered for GST.