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  • GST on sales of Australian accommodation by offshore sellers

    From 1 July 2019, offshore sellers of Australian commercial accommodation are required to include sales of Australian accommodation in their goods and services tax (GST) turnover to determine if they are required to register for, charge and pay GST.

    This new law means offshore sellers of Australian accommodation receive the same tax treatment as domestic sellers.

    Sales of accommodation paid for (in part or in full) before 1 July 2019 are not affected by the law change.

    On this page:

    See also:

    Who charges GST

    If you sell taxable accommodation and your turnover is over the GST threshold you need to charge GST.

    Examples of taxable accommodation sales include:

    • hotels
    • motels
    • hostels
    • serviced apartments
    • student accommodation
    • caravan and tourist parks
    • ships and boats – if there is a taxable supply, such as house boat hire or cruise operator
    • bed and breakfast accommodation.

    Example 1: Offshore seller providing Australian accommodation

    Downtown Holidays is based in the United Kingdom (UK) and sells Australian accommodation to customers in the UK and Australia.

    Downtown Holidays purchases Australian hotel rooms from Sydney Sider Hotel at GST inclusive wholesale room rates. This means, Sydney Sider Hotel charges GST to Downtown Holidays when it initially purchases the hotel rooms. These are taxable sales of commercial accommodation and Sydney Sider Hotel is required to collect GST for those sales.

    Downtown Holidays on-sells the hotel rooms to customers at retail rates that include their profit margin.

    In the last 12 months, Downtown Holidays sells rooms totalling A$80,000.

    Downtown Holidays must register for GST and account for GST on its sales of Australian accommodation made after 1 July 2019.

    End of example

    Not all sales of Australian accommodation are subject to GST

    Commercial residential premises and accommodation through the sharing economy are examples of supplies that do not attract GST.

    Supplies of residential leases and renting out all or part of a home on a short-term non-commercial basis are input taxed sales. These aren’t subject to GST in Australia (input-taxed supplies may be referred to as exempt supplies in other jurisdictions).

    If you act as an agent and only facilitate sales of accommodation, you aren’t responsible for GST on the sale of accommodation. However, you may have other GST obligations on your services.

    See also:

    When to register for GST

    You need to register for GST within 21 days of:

    • your 'current GST turnover' (turnover for the current month and the previous 11 months) totals A$75,000 or more (A$150,000 or more for non-profit organisations)
    • your 'projected GST turnover' (total turnover for the current month and the next 11 months) is likely to be A$75,000 or more (A$150,000 or more for non-profit organisations).

    Once you are registered, you can:

    • issue tax invoices for the sale of the accommodation,
    • claim GST credits.

    You may backdate your GST registration to 1 July 2019 if needed.

    Working out your GST turnover

    Your GST turnover is your gross business income (not your profit), excluding any:

    • GST included in sales to your customers
    • sales that aren't for payment and aren't taxable
    • sales not connected with an enterprise you run
    • input-taxed sales you make
    • sales not connected with Australia.

    How to register

    You need to use the same GST registration as domestic entities (not simplified registration).

    Before registering for GST you need an Australian business number (ABN). When applying for your ABN, you can also apply for GST registration and an AUSkey at the same time.

    Non-residents need to provide additional documentation and evidence of identity when applying for an ABN. This means, your registrations may take some time.

    An AUSkey is a secure login that identifies you when using Australian government online services. Your AUSkey will enable you to lodge business activity statements (BAS) for reporting GST.

    Next steps:

    Apply for an ABN

    GST requirements once you are registered

    Once you are registered, or required to be registered for GST, you need to:

    Example 2: GST requirements

    In the last 12 months, Downtown Holidays sells rooms totalling A$80,000, which means they are over the GST threshold and must register for GST.

    This means there are certain obligations they need to complete.

    Downtown Holidays must:

    • include these sales in its GST registration turnover calculation
    • register for Australian GST as its turnover meets the GST registration turnover threshold of A$75,000 or more
    • charge GST to customers purchasing hotel rooms as they are taxable accommodation
    • consider if they are entitled to claim GST credits for GST included in wholesale room rates
    • report their GST liabilities and GST credit claims in their business activity statement that must be lodged monthly or quarterly
    • issue tax invoices to customers on request within 28 days.
    End of example

    Concessional arrangements

    You can apply for concessional arrangements for sales made up until 30 June 2020 while you transition into the Australian GST system.

    The concession isn't automatic and you need to apply to access it. When you make a genuine attempt to comply we will apply the concession and you won't have to pay penalties associated with sales made up until 30 June 2020.

    The concessions include:

    1. deferrals of lodgment or payment
    2. remission of general interest charge (GIC) and failure to lodge on time (FTL) penalties
    3. remission of shortfall penalties where a business activity statement needs to be amended to include sales affected by the law change.

    The concession doesn’t alter the GST amount payable. You still need to pay the GST due from on all your taxable sales of Australian accommodation.

    How to apply for concessional treatment

    If you want to access concessional treatment you need to apply to us and notify:

    • that you are an offshore seller of Australian accommodation affected by the law changes
    • what aspects of your GST obligations you are requesting be deferred or remitted (as numbered above)
    • when you will be able to fully comply.

    You can apply for concessional treatment by:

    Note: sending emails has the risk of potential compromise of personal information as transmission is on a public domain.

    • faxing  
      • from outside Australia: +612 7922 4002
      • within Australia: 1300 337 921
       
    • phone us  
      • from outside Australia  
        • phone +61 2 6216 1111 between 8.00am and 5.00pm Australian Eastern Standard Time (AEST) or Australian Eastern Daylight Time (AEDT), Monday to Friday
        • ask for 1300 146 094
        • wait until you hear instructions to enter the three digit call-back code
        • enter the call-back code 118 and #  
         
      • from within Australia  
        • phone 1300 146 094 between 8.00am and 6.00pm Australian Eastern Standard Time (AEST) or Australian Eastern Daylight Time (AEDT), Monday to Friday
        • wait until you hear instructions to enter the three digit call-back code
        • enter the call-back code 118 and #
         
       
    • send mail  
      • you can mail your request to
       

    Australian Taxation Office
    PO Box 1129
    PENRITH  NSW   2740

    Calculating currency conversion

    If you're paid in a currency other than Australian dollars, you need to convert the amount into Australian dollars.

    Use the following example to convert amounts into Australian currency:

    • amount in foreign currency ×(1 ÷ your particular exchange rate on the conversion day).

    Your particular exchange rate

    You can use the following exchange rate options as your particular exchange rate:

    Use your particular exchange rate consistently.

    Your conversion day

    Your conversion day is the date used to convert your foreign currency into Australian currency for GST purposes.

    • If you account for GST on a cash basis, your conversion day can be any receipt, invoice or transaction date.
    • If you account for GST on an accruals (non-cash) basis your conversion day is the earlier of:  
      • the day the payment is received (receipt) date
      • the transaction or invoice date.
       

    See also:

    • GSTR 2001/2 Goods and Services Tax: foreign exchange conversions

    Information for Australian accommodation providers

    Australian accommodation providers using offshore intermediaries to sell accommodation need to determine if they are selling:

    • directly to customers using the accommodation – offshore entity is acting as an agent
    • directly to an offshore seller – as a re-seller.

    Where offshore intermediaries are:

    • re-selling your accommodation, you need to  
      • provide a tax invoice to the offshore seller within 28 days of their request or enter into a recipient-created tax invoice (RCTI) agreement
      • show the wholesale amount the offshore seller pays you, (not the amount paid by the offshore seller's customer)
       
    • acting as your agent you need to  
      • provide a tax invoice to the customer purchasing the accommodation within 28 days of request
      • show on the invoice the full amount the customer pays for the accommodation.
       

    See also:

    Information for purchasers of Australian accommodation

    GST-registered businesses purchasing accommodation for business purposes may be entitled to claim GST credits for purchases made from offshore sellers after 1 July 2019.

    To claim a GST credit, you need a tax invoice.

    Information for offshore entities acting as an 'agent'

    Offshore businesses act as 'agents' if they provide a facilitation arrangement or booking service rather than making sales of Australian accommodation directly to customers.

    Offshore agents need to consider if their services are subject to GST.

    Under special rules, imported services and digital products from overseas-based suppliers are subject to GST when supplied to an 'Australian consumer'. Agency services, such as booking services, from offshore agents to GST registered Australian hotels aren't subject to GST because the hotel business isn't an Australian consumer.

    Example 3: An agency booking service

    • Blue Ltd is an 'agent'. They are a German based online travel operator that provides a hotel booking service for Australian hotels and isn't registered for GST in Australia.
    • Sun Hotel operates a hotel in Australia and is a GST registered Australian resident.
    • Sun Hotel engages Blue Ltd to sell hotel rooms on its behalf and lists its available accommodation and room prices on Blue Ltd's website.
    • Sun Hotel agrees to pay Blue Ltd a commission for each room sold through Blue Ltd at the rate of 15% of the price paid by the (resident or non-resident) customer.

    Ben purchases a room from Sun Hotel via Blue Ltd's booking website and is charged A$330.

    Blue Ltd accepts the $330 for the room booking on behalf of Sun Hotel.

    Blue Ltd charges Sun Hotel a fee of A$49.50 for the booking services. Under the arrangement Blue Ltd is only supplying booking services (agent) and isn't the supplier of the hotel room.

    As a result of this transaction

    Blue Ltd (agent)

    • If Blue Ltd was registered or required to be registered for GST, the $49.50 booking service would be subject to GST if Sun Hotel is an Australian consumer. Sun Hotel isn't an Australian consumer because they are an Australian GST registered business.
    • Blue Ltd isn't required to register for Australian GST if it only makes supplies of booking services to Australian GST registered businesses, such as Sun Hotel.
    • Blue Ltd may, under an arrangement with Sun Hotel, issue a tax invoice to Ben on Sun Hotel's behalf for the supply of the room.

    Sun Hotel (supplier of room)

    • Sun Hotel is making a GST taxable sale of the hotel room to the customer (Ben) in the amount of $330 – the price Ben paid for the room.
    • Sun Hotel must report $30 GST on its activity statement ($330 ÷11).
    • Sun Hotel must issue a tax invoice within 28 days of a request from Ben displaying the price of the room and the GST component.
    • The $49.50 booking fee Blue Ltd charges Sun Hotel is not subject to GST given Sun Hotel is not an Australian consumer – as such there is no GST credit for Sun Hotel in purchasing the booking services from Blue Ltd.

    Ben's responsibilities

    If Ben is registered for GST and travelling for business purposes he could be eligible to claim a GST credit in his next activity statement for GST included in the price he paid for the room. Ben must hold a tax invoice before claiming a GST credit. Sun Hotel or Blue Ltd (agent), not both, must provide a tax invoice for the supply of the hotel room within 28 days of a request from Ben.

    End of example

    See also:

    Your rights

    The Taxpayers' Charter explains what you can expect in all your dealings with us.

    Compliance and penalties

    If you don't register for GST and are required to, we can take action to register you for Australian GST. We will also calculate the amount of GST you are liable to pay and apply a penalty to you.

    If you don't engage with us after we have written or called you (without a good reason), we are able to:

    • calculate your business liability (using third party information, for example bank information) from the date of commencement of the law
    • compulsorily register you for GST, raise and issue a default assessment with an additional 75% administrative penalty
    • apply the general interest charge (GIC) to the amounts calculated for outstanding lodgments
    • use available debt collection processes, including seeking assistance from the tax authority in your country to collect the debt.

    Help and information

    If you can't find an answer to your question, you can:

    Our business hours are 8:00am to 5:00pm, Australian Eastern Standard Time (AEST) or Australian Eastern Daylight Saving Time (AEDST) Monday to Friday, except for national public holidays. Ask the operator to connect you to 1300 146 094 with code '118#'. You will be transferred to an officer who can help you.

    For a free interpreting service, you can phone +61 3 9268 8332 and ask to be connected to 1300 146 094.

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      Last modified: 01 Oct 2019QC 60116