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This edited version has been archived due to the length of time since original publication.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.

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Edited version of your written advice

Authorisation Number: 1051324537138

Date of advice: 5 January 2018

Ruling

Subject: GST and supply of services to a non-resident company

Question 1

Is your supply of services to the overseas company a GST-free supply under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, your supply of services to the overseas company is a GST-free supply under item 2 in the table in subsection 38-190(1) of the GST Act.

Relevant facts

You are registered for GST and carry on your business activity in Australia.

You have entered into an Agreement with a company located outside Australia where you agreed to provide the services under the general terms and conditions of the Agreement. You have provided us with a copy of the Agreement.

The services are 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.

The overseas company does not carry on any business activity in Australia.

You are not required to provide your supply to anyone 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 section 38-190

Reasons for decision

Note: Where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in section 195-1 of the GST Act.

GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if:

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

All of the above must be satisfied for your supply of services to be a taxable supply.

From the information given, your supply of services satisfies paragraphs (a) to (d) of section 9-5 of the GST Act as:

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

There is no provision under the GST Act that makes your supply of services input taxed.

GST-free supply

Relevant to your supply of services is item 2 in the table in subsection 38-190(1) of GST Act (item 2).

Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if it is a supply that is made to a non-resident that is not in Australia when the thing supplied is done, and:

Only one of the paragraphs in item 2 needs to be satisfied.

Paragraph (a) of item 2

From the fact given, your supply of services satisfy paragraph (a) of item 2 as:

Your supply of services is GST-free under paragraph (a) of item 2 to the extent that it is not negated by subsection 38-190(3) of the GST Act.

As paragraph (a) is satisfied there is no need to consider paragraph (b) of item 2.

Subsection 38-190(3) of the GST Act

Subsection 38-190(3) of the GST Act provides that without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if:

From the facts given, subsection 38-190(3) of the GST Act does not apply to your supply of services are you are not required to provide your supply to another entity in Australia.

Your supply of services is therefore GST-free under paragraph (a) of item 2.


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