ATO Interpretative Decision

ATO ID 2001/153 (Withdrawn)

Goods and Services Tax

GST and web site marketing services to non-residents
FOI status: may be released

The ATO View on this issue is contained in Chapter 10 of the Electronic Commerce Industry Partnership - Issues Register (found on ato.gov.au).

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Status of this decision: Decision Withdrawn 15 July 2005

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, an Australian based web site holder, making a GST-free supply under item 2 of subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it provides marketing services to a non-resident company?

Decision

Yes, the entity is making a GST-free supply under item 2 of subsection 38-190(1) of the GST Act, when it provides marketing services to a non-resident company.

Facts

The entity, an Australian based web site holder, provides marketing services to a non-resident company. The entity does this by providing a link on its web-site to the non-resident company's web-site.

Then, where a successful sale is made, the non-resident company provides a commission to the entity for introducing clients to the non-resident company through the entity's web site.

The non-resident company is not in Australia when the supply is made. The marketing services do not relate to goods or property situated in Australia.

The entity is registered for goods and services tax (GST). Its enterprise is carried on in Australia. The entity, in the course of its enterprise, provides marketing services. The services are provided for consideration.

Reasons for Decision

Subsection 38-190(1) of the GST Act specifies the circumstances where the supply of things other than goods or real property, for consumption outside Australia will be GST-free. Marketing services are not goods or real property, and its GST status is appropriately considered under subsection 38-190(1) of the GST Act.

Under item 2 of subsection 38-190(1) of the GST Act, a supply that is made to a non-resident who is not in Australia when the thing supplied is done, is GST-free where:

(a): the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with real property situated in Australia; or
(b): the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered or required to be registered.

From the facts in this case, the entity is making a supply of marketing services to a non-resident entity. The non-resident company is not in Australia when the supply is made and the services do not relate to goods or property situated in Australia.

Therefore, the supply of the marketing services from the web site holder is GST-free under item 2 of subsection 38-190(1) of the GST Act.

Date of decision: 23 August 2000.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-190(1)
subsection 38-190(1) item 2

Keywords
Goods and services tax
Exports
Consumption outside Australia
GST free
GST supply
Taxable supply

Business Line: GST

Date of publication: 1 August 2001

ISSN: 1445-2782

history

	Date:	Version:
	23 August 2000	Original statement
You are here →	15 July 2005	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).