• GST for foreign tour operators

    For GST, Luxury Car Tax and Wine Equalisation Tax purposes, from 1 July 2015, where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in subsection 195-1 of the GST Act.

    If you are a foreign tour operator who sells or purchases Australian travel packages (or components) you need to understand your goods and services tax (GST) obligations.

    Attention

    Terms we use

    When we say:

    • you, we mean you as a foreign tour operator (FTO) who  
      • carries on an enterprise outside Australia, and
      • in the course of that enterprise, purchases Australian travel packages or components for re-sale to other suppliers or to travellers
       
    • sale or seller, we are referring to the GST term supply or supplier
    • purchase, we are referring to the GST term acquisition
    • GST credit, we are referring to the GST term input tax credit
    • payment made or received, we are referring to the GST term consideration.
    End of attention

    Registering for GST

    You are not required to register for GST in Australia.

    However, if you conduct other activities in Australia you may be required to be registered for GST in Australia. In this instance, your sales of Australian travel packages or components will be taxable.

    You may choose to register, even if you are not required to be registered for GST in Australia.

    Example 1: Foreign tour operator required to register as a result of other activities

    Bob operates a business outside Australia called International Transactions Pty Ltd. As part of this business, Bob's company operates two divisions called:

    • Bob's Machinery (which imports and sells machinery in Australia)
    • Bob's Travel Services (which sells Australian travel packages).

    Due to the nature of the sales that Bob's Machinery makes, International Transactions Pty Ltd must register for GST in Australia and must pay GST on its supplies of Australian travel packages through Bob's Travel Services.

    End of example

    Your sales and purchases

    If you are registered for GST in Australia and you sell Australian travel packages or components, you:

    • are liable to pay GST on your sales of Australian travel packages or components
    • must report the GST on your activity statement and pay the GST to the Australian Taxation Office (ATO)
    • are entitled to claim GST credits for the GST in the price of your business purchases of Australian travel packages or components.
    Attention

    You are still liable for GST, but are not entitled to claim GST credits if you purchase Australian travel packages or components from an enterprise that is not registered for GST.

    End of attention

    If you are not registered or required to be registered for GST in Australia, you:

    • are not liable to pay GST on your sales of Australian travel packages or components
    • are not entitled to claim GST credits for the GST in the price of your business purchases of the Australian travel packages or components.

    Example 2: Foreign tour operator not registered for GST

    Black Pearl Travel is a foreign tour operator based in China. Black Pearl Travel purchases Australian travel packages from Emu-Roo Travel, a resident tour wholesaler in Sydney. The purchase price of each package includes GST.

    Black Pearl Travel chooses not to register for GST in Australia. It does not sell anything else for which it would be required to be registered for GST in Australia.

    Black Pearl Travel is not registered for GST in Australia, so it is not liable for GST on its sales of Australian travel packages to tourists wishing to travel to Australia. Also, Black Pearl Travel cannot claim GST credits for the GST in the price of Australian travel packages purchased from Emu-Roo Travel.

    Example 3: Foreign tour operator registered for GST

    Bonsai Travel is a foreign tour operator based in Japan that has chosen to register for GST in Australia. Bonsai Travel purchases Australian travel packages from Emu-Roo Travel, a resident tour wholesaler in Sydney. The purchase price of each package includes GST.

    Bonsai Travel sells the Australian travel packages to tourists wishing to travel to Australia.

    As Bonsai Travel is registered for GST in Australia, it is liable for GST on its sales of Australian travel packages, even though it sells them from Japan.

    Bonsai Travel must report the Australian GST it is liable to pay in its activity statement and pay the GST to the ATO. It is also entitled to claim GST credits for the GST in the price of the Australian travel packages purchased from Emu-Roo Travel.

    End of example

    Taxable components of Australian travel packages

    If you are registered or required to be registered for GST, rights to Australian land products are taxable. These include:

    • hotel accommodation
    • car hire
    • domestic transfers
    • tickets for entry to entertainment venues
    • restaurant meals.
    Attention

    Generally, international passenger transport is not taxable. For further information, refer to the Tourism and Hospitality Industry Partnership Issues Register.

    End of attention

    More information

    For more information on:

    To obtain a copy of our publications or for more information:

    • visit our website
    • phone 13 28 66
    • write to us at

    Australian Taxation Office
    PO Box 3524
    ALBURY  NSW  2640
    AUSTRALIA

    If you do not speak English well and need help from us, phone the Translating and Interpreting Service on 13 14 50.

    If you have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below:

    • TTY users, phone 13 36 77 and ask for the ATO number you need
    • Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
    • internet relay users, connect to the NRS on relayservice.com.auExternal Link and ask for the ATO number you need.
      Last modified: 24 Jun 2015QC 18133