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Authorisation Number: 1051271010775
Date of advice: 30 November 2017
Subject: GST and Enterprise
Whether the services you supply as part of your position on a board/committee are subject to GST?
Relevant facts and circumstances
● You were an employee.
● You were asked to hold a position on a board that is located in the indirect tax zone.
● This position on the board was not connected to your employment.
● You did not receive remuneration for sitting fees because of your employment.
● Your role and responsibilities for the position on the board is at a high level and done in a recurrent or regular nature. They are also systematic and organised and carried out in a professional and business-like manner.
● When you left your employment, you became entitled to receive remuneration for your position on the board.
● These payments are not subject to any PAYG withholding.
● After you became entitled to receive remuneration, you commenced a different enterprise as a sole trader and registered for GST.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) 1999 Section 9-5
Reasons for decision
GST is payable on any taxable supplies that you make. Section 9-5 provides you make a taxable supply if:
(a) you make the supply for consideration; and
(b) the supply is made in the course or furtherance of an enterprise that you carry on; and
(c) the supply is connected with the indirect tax zone; and
(d) you are registered, or required to be registered for GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
When you became registered for GST, the services you supplied in your position on the board satisfies the conditions for a taxable supply:
● the services were made for consideration or remuneration;
● the services were made in the course of an enterprise you carry on;
● the supply was made or connected with the “indirect tax zone”; and
● the services are not GST-free or input taxed supplies.
As a sole trader, it did not matter that you registered for GST for another enterprise you carried on. When the conditions for section 9-5 are satisfied for any supply you make, the supply will be taxable and is subject to GST.