Ruling Compendium GSTD 2015/1EC
Status: not legally binding







This edited version of the Compendium of Comments is not intended to be relied upon. It provides no protection from primary tax, penalties, interest or sanctions for non-compliance with the law. | This is a compendium of responses to the issues raised by external parties to Draft Goods and Services Tax Determination GSTD 2014/D4 Goods and services tax: is the supply of brokerage services that facilitates the sale or purchase of financial products on overseas securities or futures exchanges, a GST-free supply under paragraph (a) of item 4 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999? | This compendium of comments has been edited to maintain the anonymity of entities that commented on the Draft Determination. | ATO Response/Action taken | To help solve the federal deficit issue, couldn't certain purchases only constitute a taxable supply, to make investors utilise brokerage services to purchase only Australian stock and financial products. | The Australian broker passes on these taxes as part of its brokerage services, Australia should not apply GST twice. | As the provision of advice and facilitating the engagement of an offshore broker to purchase or sell offshore securities is all done in Australia, it follows that these are taxable supplies rendered within Australia. | Whilst the supply of brokerage is connected with Australia which is a requirement for making a taxable supply, when Item 4 of subsection 38-190(1) applies a supply can be GST-free despite it being connected with Australia. | If one were to start with a clean sheet of paper, things could look very different. Perhaps the following suggestions, not all encompassing and in no particular order, might be a start: | This comment refers to amending the GST Act; this is a policy matter for government on which the ATO is not able to comment. | Whilst the difficulties in paragraph 20 do exist they do not appear relevant as paragraphs 18 and 19 have already concluded how use is determined. Accordingly, we suggest that Paragraph 20 be removed from the final version of the Determination. | Paragraph 21 makes it clear that the broker doesn't need to consider all the factors in paragraph 18 and 19 for each transaction, they can rely upon the location of the exchange to determine where use occurs.