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Edited version of your written advice
Authorisation Number: 1012683965744
Ruling
Subject: GST and international services
Question
Is the supply of marketing services to an Country X-based company a GST-free supply under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes. The supply in the circumstances you described is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act (item 2). This is because:
• the supply of marketing services is made to a Country X-based company that is not a resident of Australia for income tax purposes and that does not carry on a business in Australia either on its own or through an agent
• the supply of marketing services is neither a supply of work physically performed on goods situated in Australia nor a supply directly connected with real property situated in Australia
• the Country X-based company is neither registered nor required to be registered for GST in Australia and
• the supply of the marketing services does not involve a supply of a right or option to acquire another thing; does not relate to making input taxed supplies of real property; and there is no agreement with the Country X-based company to provide your marketing services to another entity in Australia.
Relevant facts and circumstances
You are currently not registered for GST. However, your GST turnover from your business activities will exceed $75,000 and you will be required to be registered.
You have been approached by a Country X-based company to provide marketing services to them. A contract is being drafted but not yet available at the time of applying for this private ruling.
The Country X-based company sells online hosted software and intends to sell them to Australian customers. The information available to you indicate that they conduct all their business operations from Country X and all dealings with the Customers in Australia and anyone else are done from their Country X offices. They do not have a permanent establishment in Australia and are not residents of Australia for income tax purposes. In addition, they are neither registered nor required to be registered for GST in Australia.
Your role is to introduce the product to potential Australian customers and lead to the sale. You do not have the authority to enter into legal relations with other entities in Australia on behalf of the Country X-based company.
All sales will be negotiated between the Country X-based company and the customer. You will not have any involvement in these sales although the fees for your services are based on successful sales made by the Country X-based company.
The marketing services will be supplied to the Country X-based company and there will be no requirement to provide this to anyone else in Australia.
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 Subsection 38-190(1).
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(2).
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-190(3).
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