Edited version of private advice

Authorisation Number: 1012633985727

Ruling

Subject: GST and supply of visa services

Question 1

Is the supply of visa assistance services to arrange an overseas visa by an Australian resident entity (you) to Australian and non-resident individuals a taxable supply?

Answer 1

Australian and non-resident individuals in Australia

The supply of visa assistance services to arrange an overseas visa by you to Australian and
non-resident individuals in Australia is a taxable supply.

Non-resident individuals outside Australia

The supply of visa assistance services to arrange an overseas visa by you to non-resident individuals outside Australia is GST-free.

Question 2

Is the supply of the Overseas starter pack by you to Australian and non-resident individuals a taxable supply?

Answer 2

Australian and non-resident individuals in Australia

The supply of the overseas starter pack by you to Australian and non-resident individuals in Australia is a taxable supply.

Non-resident individuals outside Australia

The supply of the overseas starter pack by you to non-resident individuals outside Australia is GST-free.

Question 3

Is the supply of the overseas job links by you to Australian and non-resident individuals a taxable supply?

Answer 3

Australian and non-resident individuals in Australia

The supply of the overseas job links by you to Australian and non-resident individuals in Australia is a taxable supply.

Non-resident individuals outside Australia

The supply of the overseas job links by you to non-resident individuals outside Australia is
GST-free.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it.

The fact sheet has more information about relying on your private ruling.

You are an Australian entity which is registered for goods and services tax (GST).

You supply visa assistance services to arrange an overseas visa, overseas Starter pack and overseas job links to individuals in Australia and non-residents who are planning to travel overseas.

You are not a registered travel agent.

The details of the services you provide are below:

Assistance services to arrange an overseas visa

You supply visa assistance services to arrange an overseas visa to applicants in Australia and outside Australia. You charge a service fee for your supply of visa arranging services. The payment for your service fee is made to your account in a single transaction. The visa application fees are not included in your service fee. The payment of the overseas visa application fees is the responsibility of the applicant and they make this payment directly to the overseas country when advised by your consultants.

Most of your clients are from Australia but some are from overseas. The overseas visa applications are processed at the processing hub which is based outside Australia.

The individuals provide you with their details through your online portal on your website and upload any supporting documentation for you to check the validity. You check whether the information is accurate and the paperwork and documents are valid and suitable for the overseas visa. You then complete the visa application form on the overseas border agency's website on your client's behalf.

You operate on a "no visa" - "no fee" basis (unless otherwise notified in writing) hence if the application is not successful as a result of your actions, then you refund the amounts paid.

You do not refund the money if the client

• changes his/her mind; or

• finds the services offered elsewhere; or

• has already commenced an application with you and then cancels your services; or

• supplies false information that results in their application being declined; or

• for any loss or damage caused by an embassy/consulate issuing an incorrect visa or incorrect details on a visa; as that is out of your control.

The decision to grant or deny the application for a visa is a decision of the Embassy or Consulate overseas and is outside your control.

Overseas Starter pack

The online overseas starter pack contains the links to the services that your clients will find useful for settling overseas. The links offer:

• access to online forms to open a bank account overseas;

• information on how to apply for the relevant government identification number, which is similar to a tax file number;

• links to enable your clients to receive a free money transfer to send money to overseas.

• links to an overseas travel entity who provides trips to events overseas.

For the overseas bank account, you do not receive any commission from the banks. You just supply the links to your clients. The bank account is an overseas bank account and the cards your client receives are overseas based credit and debit cards.

In regards to the government identification number you do not receive any income from third parties for providing the information. You simply provide the information that your clients will need when they get to overseas to apply for the government identification number.

You provide a link to your clients to view the overseas tours and trips provided by the overseas travel entity. By quoting you as the source your clients receive a discount on trips. All trips provided by the overseas travel entity are conducted overseas. You do not receive any third party income for providing this link to your clients.

Overseas job links

With regard to the overseas job links, your clients provide you with their details and you pass on their resumes on to the overseas company. The overseas company then contacts the individual for further details and deals directly with your client.

You charge a fee to your clients to make the link to the overseas company and do not receive any commission. However you do not receive any third party income for providing this link to your clients from the overseas company.

Relevant legislative provisions:

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

A New Tax System (Goods and Services Tax) Act 1999 Section 9-25

A New Tax System (Goods and Services Tax) Act 1999 section 38-190

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(3)

A New Tax System (Goods and Services Tax) Act 1999 section 38-360

Tourism and hospitality industry partnership - issues register

Reasons for decisions

Issue 1

Taxable supply

GST is payable on a taxable supply.

Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) you make a taxable supply if:

(a) you make the supply for consideration;

(b) the supply is made in the course or furtherance of an enterprise that you carry on;

(c) the supply is connected with Australia; and

(d) you are registered or required to be registered.

However, a supply is not a taxable supply to the extent that it is GST-free or input taxed.  

From the facts provided, you satisfy the requirements of a taxable supply under paragraphs 9-5(a) to 9-5(d) of the GST Act as follows:

(a) you supply the services in return for consideration by way of payments;

(b) the supply is made in the course of an enterprise (business) that you carry on;

(c) the supply is connected with Australia as you are carrying on your enterprise in Australia; and

(d) you are registered for GST.

The supply of visa assistance services to arrange an overseas visa by you to Australian and non-resident individuals is not input taxed under any provisions of the GST Act or any other legislation.

The next step is to determine whether the supply is GST-free.

GST-free

Section 38-190 of the GST Act specifies when supplies of things, other than goods or real property, for consumption outside Australia are GST-free. As the supply of visa assistance services to the applicants is not considered to be a supply of goods or real property, their GST status is appropriately considered under this section.

Of relevance to the facts provided is item 3 in the table in subsection 38-190(1) of the GST Act (Item 3).

Item 3 is stated below: 

Australian and non-resident individuals in Australia

From the information provided, the visa assistance services to arrange an overseas visa for Australian and non-resident individuals are provided to the individual who is in Australia when the dominant part of the supply of the services is done.

Hence, when you supply the visa assistance services to Australian and Non-resident individuals, this supply will not be GST-free under Item 3 as the individual is in Australia when the service is performed.

The fact that the outcome of the supply (receiving the overseas visa) is later used outside Australia does not alter the outcome that the effective use or enjoyment of the supply (organising the overseas visa) takes place in Australia since the individual is in Australia at the time the supply of visa assistance services is done.

Further subsection 38-190(4) of the GST Act is not applicable as there is no indication that Australian and non-resident individuals have requested that you provide your services to another entity outside Australia.

Accordingly, the supply of visa assistance services to arrange the overseas visa by you to Australian and non-resident individuals whilst they are in Australia will not be GST-free under section 38-190 of the GST Act.

Section 38-360 of the GST Act

You asked us to consider if the supply of visa assistance services to arrange the overseas visa by you to Australian resident applicants in Australia is GST free under section 38-360 of the GST Act.

Section 38-360 of the GST Act provides:

Travel Agents arranging overseas supplies

A supply is GST-free if:

(a) the supplier makes it in the course of carrying on an enterprise as a travel agent; and

(b) it consists of arranging for the making of a supply, the effective use or enjoyment of which is to take place outside Australia.

Paragraph (a) of section 38-360 of the GST Act

The term travel agent is not defined in the GST Act. However we consider, as expressed in the fact sheet, 'GST Travel agents and commissions' that a travel agent is not limited to registered travel agents but can cover other tourism enterprises, such as airlines, hotels and professional conference organisers, who arrange domestic and overseas travel on behalf of another person or persons.

The arranging of the land content for international travel is GST-free if you, in the course of carrying on its enterprise as a travel agent, make a sale, which will be used or enjoyed outside Australia.

Paragraphs 1.11 and 1.12 of the Explanatory Memorandum to the Taxation Laws Amendment Bill (No. 8) 2000 under the heading 'International Travel Provisions - commission' provides further guidance. It states:

1.11 The GST Act generally treats commissions paid to travel agents for agency services the same way as the GST treatment of the travel. Under the current GST legislation, travel agent fees that relate to overseas air transport are GST-free while those that relate to other overseas supplies such as accommodation, rail transport, car hire, meals, entertainment and sight-seeing tours are taxable.

1.12 Item 4 inserts new section 38-360 into the GST Act. This new section allows for the supply of arranging overseas supplies to be GST-free where the effective use or enjoyment of the supply is to take place outside Australia. New section 38-360 only applies to the arranging of overseas supplies made by a supplier in the course of carrying on an enterprise as a travel agent.

Example 1.2

Dale and her cousin Lauren are planning an overseas trip. They booked a holiday package through their local travel agent. The package includes return air fares (Sydney, London, Sydney), accommodation and car hire in London and a European tour which includes dinner and a show at a night club in Paris. The travel agent fees relating to all the components of the overseas trip are GST-free, that is, the overseas air transport and the overseas supplies.

After arranging their tour package, Dale and Lauren hear that a particular travel agent in Sydney can arrange for them to bungy jump off the le Tour Lansperie while they are in Paris. Dale and Lauren decide to take up this opportunity and make a booking. The travel agent fee charged for booking the bungy jump is also GST-free as the fee relates to a separate supply, the effective use or enjoyment of which takes place outside Australia.

Based on the facts provided, you are not a registered travel agent. You do not provide any domestic or international travel reservations or booking services. In addition, the visa assistance services that you provide, does not qualify you to be considered as a travel agent. Therefore, you are not a tourism enterprise 'carrying on an enterprise of a travel agent' and the supply of visa assistance services by you does not satisfy subsection 38-360(a) of the GST Act.

Paragraph (b) of section 38-360 of the GST Act

Paragraph (b) of section 38-360 of the GST Act requires that the place of effective use or enjoyment of a supply to be determined (that is, whether the place is outside Australia).

First, we determine the entity to which the supply is provided (the providee entity). We then determine whether provision of the supply to the providee entity is outside Australia. In this case, the providee entity will be the individual applicants to whom you provide your services to.

A supply is provided as and when the thing supplied is done. This is the relevant time for determining whether a supply is provided to the individual in Australia or outside Australia and thus whether effective use or enjoyment takes place in Australia or outside Australia.

Resident individual

A supply is provided to a resident individual in Australia if that individual:

• is physically in Australia when the thing supplied is done; or

• is physically outside Australia when the thing supplied is done but that presence outside Australia is not integral to, but is merely coincidental with, the provision of the supply.

A supply is provided to a resident individual outside Australia if that individual:

• is physically outside Australia when the thing supplied is done; and

• that presence outside Australia is integral to, as distinct from being merely coincidental with, the provision of the supply.

To the extent that the supply is provided to a resident individual in Australia effective use or enjoyment of the supply does not take place outside Australia and the supply is not GST-free.

Alternately, to the extent that the supply is provided to a resident individual outside Australia, effective use or enjoyment of the supply takes place outside Australia and the supply is GST-free if the other requirements of Item 3 are met and subsections 38-190(2) and (2A) of the GST Act do not apply.

Non-resident individual

A supply is provided to a non-resident individual outside Australia if that individual:

• is physically outside Australia when the thing supplied is done; or

• is physically in Australia when the thing supplied is done but that presence in Australia is not integral to, but merely coincidental with, the provision of the supply.

A supply is provided to a non-resident individual in Australia if that individual is:

• physically in Australia when the thing supplied is done; and

• that presence in Australia is integral to, as distinct from being merely coincidental with, the provision of the supply.

To the extent that the supply is provided to an individual in Australia effective use or enjoyment of the supply does not take place outside Australia and the supply is not GST-free.

If the supply is provided to an individual in Australia and that supply is later used outside Australia, that later use does not alter that fact that the supply is provided to that entity in Australia and thus effective use or enjoyment of the supply does not take place outside Australia.

From the facts provided, you supply your visa assistance services to Australian and non-resident individuals in Australia, thus the effective use and enjoyment of the supply takes place in Australia. Therefore, paragraph (b) of section 38-360 is not applicable.

Accordingly, the supply of visa assistance services to Australian and non-resident individuals in Australia is not GST-free under section 38-360 of the GST Act.

Furthermore, the supply of visa assistance services to Australian and Non-resident individuals in Australia does not satisfy any other GST-free provisions.

Therefore, the supply of visa assistance services to arrange the overseas visa by you to Australian and non-resident individuals in Australia is a taxable supply under section 9-5 of the GST Act and you will be liable for GST on that supply.

Non-resident individuals outside Australia

When you provide the visa assistance services to an individual, who is a non-resident of Australia and located outside Australia, your supply will satisfy Item 3 as:

• the supply is made to a recipient who is not in Australia when this service is done;

• the effective use or enjoyment takes place outside Australia since the individual is not in Australia; and

• the supply is neither a supply of work physically performed on goods situated in Australia when the service is done nor a supply directly connected with real property situated in Australia.

Therefore, the supply of this service to non-resident individuals located outside Australia is GST-free under Item 3.

Issue 2

The supply of the overseas starter pack

Before we consider the GST status of the supply of the overseas starter pack by you to Australian and non-resident individuals, we first need to consider the character of the supply.

Supply

The meaning of supply is defined in section 9-10 of the GST Act. It states:

(1) A supply is any form of supply whatsoever.

(2) Without limiting subsection (1), supply includes any of these:

(a) a supply of goods;

(b) a supply of services;

(c) a provision of advice or information;

(d) a grant, assignment or surrender of *real property;

(e) a creation, grant, transfer, assignment or surrender of any right;

(f) a *financial supply;

(g) an entry into, or release from, an obligation:

(i) to do anything; or

(ii) to refrain from an act; or

(iii) to tolerate an act or situation;

(h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

Your supply of the overseas starter pack is not considered a supply of goods. Furthermore, it is clear that the supply of the overseas starter pack is not a supply of real property. Therefore, it is a supply of things other than goods or real property.

Based on the facts provided, the overseas starter pack contains the links to the services that your clients will find useful for settling overseas. Therefore, we consider that you are providing a service.

The next step is to determine whether the supply of the overseas starter pack to Australian and non-resident individuals is a taxable supply.

Taxable supply

As discussed in the reasons for decisions to question 1, GST is payable on a taxable supply under section 9-5 of the GST Act.

You satisfy the requirements of a taxable supply under paragraphs 9-5(a) to 9-5(d) of the GST Act as you make the supply of the overseas starter pack for consideration; the supply is made in the course or furtherance of your enterprise; the supply is connected with Australia and you are registered for GST.

There are no provisions under the GST legislation in which the supply of the overseas starter pack by you to Australian and non-resident individuals could be input taxed. What remains to be determined is whether the supply is GST-free.

GST-free

As discussed in the reasons for decision to question 1, the supply of the overseas starter pack to Australian and non-resident individuals will be GST-free if it satisfies all the requirements in subsection 38-190(1) of the GST Act.

Of relevance to the facts provided is item 3.

Australian and non-resident individuals in Australia

You provide the overseas starter pack to Australian and non-resident individuals when the individual is in Australia. The overseas starter pack contains links to the services which they will find useful for settling overseas. However, the links are provided to the individual when the individual is in Australia.

Hence, when you perform the supply of services (providing the overseas starter pack) for Australian and non-resident individuals, this supply will not be GST-free under Item 3 as the individual is in Australia when the service is performed.

Further subsection 38-190(4) of the GST Act is not applicable as there is no indication that Australian and/or Non-resident individuals have requested that you provide the overseas starter pack to another entity outside Australia.

Accordingly, the supply of the overseas starter pack by you to Australian and non-resident individuals in Australia will not be GST-free under section 38-190 of the GST Act.

Non-resident individuals outside Australia

As discussed in the reasons for decisions to question 1, your supply of the overseas starter pack will satisfy Item 3 as

• the supply is made to a recipient who is not in Australia when this service is done;

• the effective use or enjoyment takes place outside Australia since the individual is not in Australia; and

• the supply is neither a supply of work physically performed on goods situated in Australia when the service is done nor a supply directly connected with real property situated in Australia.

Accordingly, the supply of the overseas starter pack to non-resident individuals outside Australia is GST-free under Item 3.

Issue 3

The supply of the overseas job links

Taxable supply

As discussed in the reasons for decisions to question 1, GST is payable on a taxable supply under section 9-5 of the GST Act.

You satisfy the requirements of the taxable supply under paragraphs 9-5(a) to 9-5(d) of the GST Act as you make the supply of the overseas job links for consideration; the supply is made in the course or furtherance of your enterprise; the supply is connected with Australia and you are registered for GST.

There are no provisions under the GST legislation in which the supply of the overseas job links by you to Australian and non-resident individuals could be input taxed. What remains to be determined is whether the supply is GST-free.

GST-free

As discussed in the reasons for decision to question 1, the supply of the overseas job links to Australian and non-resident individuals will be GST-free if the supply satisfies all the requirements in subsection 38-190(1) of the GST Act.

Of relevance to the facts provided is item 3.

Australian and non-resident individuals in Australia

You provide the overseas job links to Australian and non-resident individuals when the individual is in Australia.

Hence, when you supply the overseas job links to Australian and non-resident individuals, this supply will not be GST-free under Item 3 as the individual is in Australia when the service is performed.

Further subsection 38-190(4) of the GST Act is not applicable as there is no indication that the Australian and non-resident individuals have requested that you provide the overseas job links to another entity outside Australia.

Accordingly, the supply of the overseas job links by you to Australian and non-resident individuals in Australia will not be GST-free under section 38-190 of the GST Act.

Non-resident individuals outside Australia

Based on the facts provided, your supply of the overseas job links will satisfy Item 3 as

• the supply is made to a recipient who is not in Australia when this service is done;

• the effective use or enjoyment takes place outside Australia since the individual is not in Australia; and

• the supply is neither a supply of work physically performed on goods situated in Australia when the service is done nor a supply directly connected with real property situated in Australia.

Accordingly, the supply of the overseas job links to non-resident individuals outside Australia is GST-free under Item 3.

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