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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012660801463

Ruling

Subject: Goods and services tax (GST) and migration advice

Question 1

Is GST payable by you on your supply of advice you provide to an overseas corporate client that does not have corporate operations in Australia if the advice relates to registering the overseas company as a standard business sponsor with the Department of Immigration and Border Protection (DIBP) and enabling an overseas skilled employee to relocate to work in Australia?

Answer

No.

Question 2

Is GST payable by you on your supply of advice you provide to an overseas corporate client that has an Australian subsidiary if the advice relates to the procedures and corresponding visa applications required to enable the overseas employees to fill positions in the Australian subsidiary?

Answer

GST may or may not be payable, depending on the situation. See reasons for decisions for more information.

Question 3

Is GST payable by you on your supply of advice to an individual who is overseas if the advice relates to an individual visa application to enable that person to travel to Australia (potentially, subject to approval)?

Answer

No.

Question 4

Is GST payable by you on your supply of advice to an individual who is in Australia on a temporary visa?

Answer

Yes.

Question 5

Is GST payable by you on your supply of advice that you provide to an Australian company in respect of an overseas employee who may be required to transfer to Australia?

Answer

Yes.

Relevant facts and circumstances

You are registered for GST.

You are an Australian based company.

You provide Australian migration related advice through your office in Australia. You charge for these services.

You require advice on the following scenarios:

Scenario 5

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

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

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

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

Reasons for decisions

Question 1

Summary

The supply of these services is GST-free under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) because the recipient is not in Australia in relation to the supply when the supply is made.

Detailed reasoning

GST is payable by you on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

(*Denotes a term defined in section 195-1 of the GST Act)

You meet the requirements of paragraph 9-5(a) to 9-5(d) of the GST Act. This is because:

There are no provisions of the GST Act under which your supplies of the services are input taxed.

Therefore, what remains to be determined is whether you are making GST-free supplies.

Item 2

Item 2 in the table in subsection 38-190(1) of the GST Act (item 2) provides that a supply of something, other than goods or real property, to a non-resident who is not in Australia when the thing supplied is done is GST-free if:

Subsection 38-190(3) of the GST Act provides that a supply covered by item 2 is not GST-free if:

Item 3

A supply of something, other than goods or real property, is GST-free under item 3 in the table in subsection 38-190(1) of the GST Act (item 3) if it is a supply:

other than a supply of work physically performed on goods situated in Australia when the thing supplied is done, or a supply directly connected with real property situated in Australia.

Subsection 38-190(4) of the GST Act provides that a supply is taken, for the purposes of item 3, to be a supply made to a recipient who is not in Australia if:

If a supply to a non-resident is not GST-free under item 2, it will not be GST-free under item 3.

In the first scenario you set out, you are supplying migration related advice, which are not goods or real property.

Goods and Services Tax Ruling GSTR 2004/7 provides the Australian Taxation Office view on the meaning of 'not in Australia' for the purposes of item 2 and item 3.

Paragraph 31 of GSTR 2004/7 states:

Paragraph 37 of GSTR 2004/7 explains when a non-resident company is in Australia. It states:

Paragraph 41 of GSTR 2004/7 explains when a non-resident company is in Australia in relation to a supply. It states:

You supply the advice to a non-resident company that does not have a presence in Australia. Therefore, this entity is not in Australia in relation to your supply when the thing supplied is done.

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.

Paragraphs 59 to 62 of Goods and Services Tax Ruling GSTR 2005/6 provide guidance on the meaning of 'supply is provided to another entity'. They state:

You supply the advice under an agreement you have with a non-resident company. However, you do not provide the advice to 'another entity in Australia'. You provide the advice to the non-resident company.

Hence, you make a GST-free supply under item 2. Therefore, you do not make a taxable supply. Hence, GST is not payable.

Question 2

Summary

The supply of the services under scenario 2 is not GST-free under section 38-190 of the GST Act if the subsidiary is a branch of the overseas company, as the recipient of the supply would be in Australia in relation to the supply when the supply is made under such circumstances.

The supply of the services is GST-free under section 38-190 of the GST Act under scenario 2 if the subsidiary is not a branch of the overseas company, as the recipient of the supply would not be in Australia in relation to the supply when the supply is made under such circumstances.

Detailed reasoning

If the overseas company carries on its own business in Australia through the subsidiary

If the overseas company carries on its own business in Australia through the subsidiary (so that the subsidiary is a branch of the overseas company) and the advice relates to procedures and corresponding visa applications required to enable the overseas employees to fill positions in the Australian subsidiary, the supply is for the purposes of the recipient's Australian presence. Therefore, the recipient would be in Australia in relation to the supply when the supply is made under such circumstances. Hence, under such circumstances, your supply of the advice is not GST-free under item 2.

There are no provisions of the GST Act under which your supply is GST-free under such circumstances. Therefore, as you meet all of the requirements of section 9-5, you make a taxable supply. Hence, GST is payable under such circumstances.

If the overseas company does not carry on its own business in Australia through the subsidiary

If the overseas company does not carry on its own business in Australia through the subsidiary and the advice relates to procedures and corresponding visa applications required to enable the overseas employees to fill positions in the Australian subsidiary, the supply is not for the purposes of an Australian presence of the overseas company in Australia and there is no such presence that is involved with the supply. Therefore, the recipient would not be in Australia in relation to the supply when the supply is made under such circumstances.

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.

You make the supply under an agreement with a non-resident company. However, you do not provide the supply to 'another entity in Australia'.

Hence, you make a GST-free supply under item 2 if the overseas company does not carry on its own business in Australia through the subsidiary. Therefore, you do not make a taxable supply under such circumstances. Hence, GST is not payable under such circumstances.

Paragraphs 245 to 326 of GSTR 2004/7 provide guidance on determining whether an overseas company carries on its own business in Australia through an agent. Type in GSTR 2004/7 into an internet search engine.

Paragraphs 319 and 320 of GSTR 2004/7 discuss the situation where a non-resident company has a subsidiary in Australia. They state:

Ask the customer whether they carry on their own business in Australia through the subsidiary or whether the subsidiary only carries on its own separate business in Australia.

Question 3

You are making a supply of advice, which is not goods or real property.

Paragraph 35 of GSTR 2004/7 explains when a non-resident individual is in Australia in relation to a supply. It states:

Paragraph 218 of GSTR 2004/7 explains 'minor contact'. It states:

You supply the advice to a non-resident individual who is physically overseas at the time you make the supply. Therefore, the recipient is not in Australia in relation to the supply when the supply is made.

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.

You make the supply under an agreement you have with a non-resident. However, you do not provide the advice to 'another entity in Australia'.

Hence, you make a GST-free supply under item 2. Therefore, you do not make a taxable supply. Hence, GST is not payable.

Question 4

You are making a supply of advice, which is not goods or real property.

You supply the advice to a non-resident individual who is physically in Australia at the time you make the supply.

The non-resident individual is in contact with you when you supply the advice and this contact is of more than a minor nature.

The individual has a consultation with you face to face; over the phone or via Skype in regards to whether they might be successful in obtaining permission to live or work in Australia and how to apply for such permission. The consultation is lengthy, for example, it can last half an hour. The individual needs to provide information to you about themselves, for example, what qualifications they have, in order for you to advise them.

The contact the non-resident individual has with you is not limited to contact of a simple administrative nature, such as checking on the progress of the supply or a courtesy call on the supplier.

Therefore, the recipient is in Australia in relation to the supply when the supply is made.

Hence, you do not make a GST-free supply under item 2.

There are no provisions of the GST Act under which these supplies are GST-free.

Therefore, as you meet all of the requirements of section 9-5, you make a taxable supply. Hence, GST is payable.

Question 5

You are supplying advice, which is not goods, or real property.

You are making a supply to a resident company. The supply is for the purposes of their Australian presence because the advice relates to an overseas employee who may be required to transfer to Australia. Therefore, the recipient is in Australia in relation to the supply when the supply is made.

You do not provide the advice to 'another entity outside Australia'.

Hence, you do not make a GST-free supply under item 3.

There are no provisions of the GST Act under which these supplies are GST-free.

Therefore, as you meet all of the requirements of section 9-5, you make a taxable supply. Hence, GST is payable.


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