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Edited version of your written advice
Authorisation Number: 1013062638070
Date of advice: 29 July 2016
Ruling
Subject: Goods and Services Tax (GST) and Trade skills assessments
Question
Are your skills assessment services provided in Australia GST-free pursuant to section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes
Relevant facts and circumstances
You are an association and registered for GST.
You are a member of a number of professional associations.
You are a Registered Training Organisation (RTO), recognised by the Australian Skills Quality Authority and also registered with the Commonwealth Register of Institutions and Courses for Overseas Students.
You assist members in realising their professional ambitions through giving international, independent recognition of members' skills through certification programs and networking so as to bring about professional development and employment opportunities. As part of your ordinary course of business, you make supplies of skills-based assessments in return for a fee.
You are an assessing authority for a government agency for assessments required for the purpose of X.
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 38-110
Reasons for decision
A supply of skills assessment services will be a taxable supply where the requirements of section 9-5 of the GST Act are met:
You make a taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
(c) the supply is *connected with the indirect tax zone; and
(d) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
(*denotes a defined term in section 195-1 of the GST Act)
Your supply satisfies the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(d) and as you carry out the assessment services in Australia through your enterprise in Australia, the supply of skills assessment services is connected with the indirect tax zone.
In examining whether your supplies can be GST-free, section 38-110 of the GST Act is relevant.
Recognition of prior learning
Section 38-110 of the GST Act deals with recognition of prior learning, it states:
1) A supply is GST-free if the supply is the assessment or issue of qualifications for the purpose of:
a) access to education; or
b) membership of a professional or trade association; or
c) registration or licensing for a particular occupation; or
d) employment.
2) However, a supply is not GST-free under subsection (1) unless the supply is carried out by:
a) a professional or trade association; or
b) an *education institution; or
c) an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services; or
d) an authority of the Commonwealth or of a State or Territory; or
e) a local government body.
(*denotes a defined term in section 195-1 of the GST Act).
Your supplies of skills-based assessments are for the educational qualifications and work experience for professional levels of X and involve the assessment of qualifications for the purpose of persons gaining employment since:
• the assessments are provided to individuals wishing to be assessed based on skilled migration issues and
• you are recognised by various government entities as the approved entity to assess the qualifications of individuals in relation to obtaining employment in certain occupations.
Your skills assessments are undertaken with a view to satisfy work qualification requirements rather than purely migration requirements in the first instance. The fact that successful migration may or may not follow is of no consequence. Therefore subsection 38-110(3) of the GST Act is satisfied by the assessments assisting with the employment criterion in paragraph (d) of this subsection.
As you are a member of and registered with various professional associations and registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition/assessment services, you satisfy the requirements of paragraphs 38-110(2)(a) and 38-110(2)(c) of the GST Act.
As a result, your skills-based assessments services are GST-free.
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