ATO Interpretative Decision

ATO ID 2007/33

Goods and Services Tax

GST and transaction information supplied by an ADI - not relating to a client's own transaction
FOI status: may be released

This ATO ID contains references to provisions of the A New Tax System (Goods and Services Tax) Regulations 1999, which have been replaced by the A New Tax System (Goods and Services Tax) Regulations 2019. This ATO ID continues to apply in relation to the remade Regulations.
A comparison table which provides the replacement provisions in the A New Tax System (Goods and Services Tax) Regulations 2019 for regulations which are referenced in this ATO ID is available.

With effect from 1 July 2015, the term 'Australia' is replaced in nearly all instances within the GST, Luxury Car Tax and Wine Equalisation Tax legislation with the term 'indirect tax zone' by the Treasury Legislation Amendment (Repeal Day) Act 2015. The scope of the new term, however, remains the same as the repealed definition of 'Australia' used in those Acts. For readability and other reasons, 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.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 an entity, an Australian authorised deposit-taking institution (ADI), making a financial supply of an interest under either item 1 in the table in subregulation 40-5.09(3) or subregulation 40-5.09(4) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations), when it provides transaction information, for not more than $1,000, to a client (also an Australian ADI) in respect of a transaction undertaken by a customer of the client?

Decision

No, the entity is not making a financial supply of an interest under either item 1 in the table in subregulation 40-5.09(3) or subregulation 40-5.09(4) of the GST Regulations when it provides transaction information, for not more than $1,000, to a client ADI in respect of a transaction undertaken by a customer of the client ADI.

Facts

The entity is an Australian ADI that carries on a banking business within the meaning of the Banking Act 1959.

The entity provides transaction information to clients that are also Australian ADIs.

The entity also provides a payment system to its client ADIs.

The transaction information relates to transactions undertaken by customers of the client ADI.

A client ADI may or may not hold an account with the entity.

The applicable fee for each request does not exceed $1,000.

The entity is registered for GST.

Reasons for Decision

Under subsection 40-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a financial supply is input taxed. Subsection 40-5(2) of the GST Act provides that a financial supply has the meaning given by the GST Regulations.

Subregulation 40-5.09(1) of the GST Regulations provides that the provision, acquisition or disposal of an interest mentioned in subregulation 40-5.09(3) or 40-5.09(4) of the GST Regulations is a financial supply if:

(a)

the provision, acquisition or disposal is:

•: for consideration
•: in the course or furtherance of an enterprise
•: connected with Australia, and

(b)

the supplier is:

•: registered or required to be registered for GST, and
•: a financial supply provider in relation to the supply of the interest.

Item 1 in the table in subregulation 40-5.09(3) of the GST Regulations lists, as a financial supply, an interest in or under an account made available by an Australian ADI in the course of:

•: its banking business within the meaning of the Banking Act, or
•: its State banking business.

For there to be a financial supply under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations, a supply must firstly be capable of characterisation as the supply of an interest in an account made available by an Australian ADI.

It is possible for a supply of transaction information to be a supply of an interest in an account under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations. This will be the case when information is supplied to a client and it relates to a transaction on the client's account. Regulation 40-5.11 of the GST Regulations operates to make the provision of transaction information a financial supply because it relates to the supply of an account in that circumstance.

However, when a client ADI obtains transaction information on behalf of a customer, the transaction information is in connection with a supply of an interest in an account by the client ADI to its customer. The service provided by the entity merely assists the making of a supply by the client ADI to its customer.

It follows that the provision of the transaction information, by the entity to the client ADI, does not involve the making of a financial supply of an interest in an account under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations. Even if the client ADI has an account with the entity, the transaction information is not provided in relation to an interest in an account by the entity to the client ADI. The transaction information is provided to the client ADI because an interest in a payment system is also supplied by the entity to the client ADI.

Subregulation 40-5.09(4) of the GST Regulations states that a supply (to which item 1 in the table in subregulation 40-5.09(3) of the GST Regulations does not apply) by an Australian ADI for a fee of not more than $1,000 is a financial supply if:

(a): the item would have applied to that supply in relation to an account with the ADI; or
(b): ...

As the provision of transaction information would not have been treated as a financial supply under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations if the client were an account holder, subregulation 40-5.09(4) of the GST Regulations has no application.

A supply of transaction information by the entity to its client ADI, when the information relates to a transaction by a customer of the client ADI, will be a taxable supply where the requirements of section 9-5 of the GST Act are satisfied.

Date of decision: 25 October 2006

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   subsection 40-5(1)
   subsection 40-5(2)

A New Tax System (Goods and Services Tax) Regulations 1999
   subregulation 40-5.09(1)
   subregulation 40-5.09(3)
   subregulation 40-5.09(3) table item 1
   subregulation 40-5.09(4)
   regulation 40-5.11

Related ATO Interpretative Decisions
ATO ID 2007/32

Keywords
Accounts
Goods and services tax
GST financial supplies
GST regulations
GST supply
Input taxed supplies

Siebel/TDMS Reference Number: 5448768

Business Line: Indirect Tax

Date of publication: 16 February 2007

ISSN: 1445-2782

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