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Edited version of your written advice
Authorisation Number: 1051309035602
Date of advice: 16 November 2017
Ruling
Subject: Goods and services tax (GST) and supply of marketing services to non-resident
Question
Is GST payable on your supply of the consultancy services to X?
Answer
No.
Your supply of these services under such circumstances is GST-free under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) (item 2), as:
● consultancy services are not supplies of goods or real property; and
● the customer in question is a non-resident who is ‘not in Australia’ for the purposes of item 2; and
● the supply of the consultancy services is not a supply of work physically performed on goods situated in Australia when the work is done nor a supply that is directly connected with real property situated in Australia; and
● you do not provide these services, under such circumstances, to third parties in Australia and no other exclusions from GST-free treatment under item 2 apply.
Relevant facts and circumstances
You are registered for GST.
You have an agreement with a non-resident entity, X to provide consultancy services in Australia to increase sales and marketing efficiency.
X is based overseas and is not registered or required to be registered for GST in Australia. X does not carry on a business in Australia.
X manufactures machines and sells them in Australia.
Using your industry experience, you identify prospective purchasers for X’s products. You will demonstrate the benefits of its products to customers; you will collect orders from customers and submit the order to X, which will process and arrange for the products to be delivered to customers.
Under the consultancy agreement, X will pay you a monthly fee for obtaining orders and a monthly bonus for achieving objectives as it relates to territory performance pursuant to the agreement.
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 38-190
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