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  • Issue 4 – Apportioning travel insurance to GST-free and/or input taxed components

    A travel agent may arrange travel insurance for an international traveller. The travel agent receives commission from the travel insurance provider.


    What is the GST treatment for commission received in relation to arranging travel insurance? What if part of the travel insurance for international transport also covers the traveller while in Australia?

    For source of ATO view, refer to paragraphs 29 to 33 of GSTR 2000/33 Goods and services tax: international travel insurance.


    A GST public ruling has issued on this topic - GSTR 2000/33 Goods and services tax: international travel insurance.

    GSTR 2000/33 at paragraphs 18 -20 and 34 states:

    '18. Insuring transport under item 6 of section 38-355 applies to the transport of passengers from and to their place of departure, and during the period that the insured is travelling overseas. Generally, there is only one insurance policy that covers the insured for both the domestic transport and while overseas.

    19. The travel from and to the place of departure is usually a very small part of international transport. A recent sample of over 500 claims by value of claim under standard policies of industry associations shows that only 0.17% of claims arose from incidents occurring between the traveller's place of departure and the airport, and from the airport to the traveller's place of departure.

    20. This examination of claims history indicates that the value to be attributed to this domestic component of the international travel policy is less than 0.5% of the total value of the transport. Provided the claims history for a particular product demonstrates that this domestic component is less than about 0.5%, there will be no need to apportion between the taxable domestic component and the GST-free international component. That portion of the cover can be included under item 6 of section 38-355 and can be treated as being GST-free.

    34. A supply of services for which a commission may be charged by travel agents, brokers and other administrators for arranging insurance for overseas travel is GST-free. The commission is payable for a GST-free supply of arranging insurance that is covered by item 6 of section 38-355. Therefore, the commission is covered by item 7(c) of section 38-355. However, in respect of executive or corporate travel policies, there is a mixed supply. That is, the supply to which the commission relates is taxable to the same extent that the insurance policy is taxable.'


    See GSTR 2000/33 Goods and services tax: international travel insurance.

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      Last modified: 28 Jun 2010QC 17668