Disclaimer
This edited version has been archived due to the length of time since original publication.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: 1051348056652

Date of advice: 13 March 2018

Ruling

Subject: GST and sales of tickets for a conference and supply of sponsorships

Question 1

Does you need to charge the Australian goods and services tax (GST) when you sell tickets for the conference that you will hold in Australia under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Advice

From the information received, you will make two distinct supplies when you sell tickets for the conference that you will hold in Australia and the GST status of each supply is:

Where your sale of the tickets for the conference supply is a mixed supply of taxable and non-taxable supplies, you will need to apportion the fees collected for the sale between the taxable and non-taxable supplies. Goods and Services Tax Ruling GSTR 2001/8 which is available at ato.gov.au will be of assistance to you. The link for this ruling is http://law.ato.gov.au/atolaw/print.htm?DocID=GST%2FGSTR20018%2FNAT%2FATO%2F00001&PiT=99991231235958&Life=20140320000001-99991231235959

Question 2

Do you need to charge the Australian GST for your supply of sponsorship in regard to the conference that will be held in Australia?

Advice

You will make three distinct supplies when you supply the sponsorship packages to the sponsors and the GST status of each supply is:

Where your supply is a mixed supply of taxable and non-taxable supplies, you will need to apportion the fees collected for the sponsorship between the taxable and non-taxable supplies. Goods and Services Tax Ruling GSTR 2001/8 which is available at ato.gov.au will be of assistance to you.

Question 3

Are there any implications for selling the tickets via an online payment method? As far as you know the online payment method cannot provide tax invoices, however maybe you can send these through to people who have purchased tickets?

Advice

The online payment method is a payment processing method you use to collect the sale of your tickets and will not have any implications to the GST status of your supply of tickets to the attendees.

Where you are registered for the Australian GST and make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice from you to be able to claim a credit for the GST in the purchase price. If a customer asks you for a tax invoice, you must provide one within 28 days of their request.

How you will provide your tax invoices to your customers is a business decision. For information on what should be in a tax invoice refer to question 3 in the ‘detailed reasoning’.

Question 4

If you register for the simplified GST are you limited for claiming back GST paid for example the conference venue bill you received includes GST? Can GST for the hotel bill be subtracted from the GST ticket sales?

Advice

If you register for the simplified GST you will not be able to claim back any GST paid on acquisitions related to the running of the conference in Sydney.

If you would like to claim the GST paid you will have to register for the standard GST registration with an ABN. Information on how to register for the standard GST registration with an ABN and what evidence to provide is at https://www.ato.gov.au/business/international-tax-for-business/in-detail/doing-business-in-australia/australian-gst-registration-for-non-residents/

The link to register for the standard GST registration with an ABN is https://abr.gov.au/For-Business,-Super-funds---Charities/Applying-for-an-ABN/ABN-for-businesses-outside-Australia/

When you are registered for GST, your entitlement to a GST credit will be offset against your GST liability at the time you complete your activity statement which will be issued to you before the due date for lodgement and payment of GST (if applicable) to the Australian Taxation Office (ATO).

Relevant facts

You are a company located outside Australia and currently are not registered for the Australian GST.

You will run a conference in Australia. There will only be one type of ticket for the conference. The ticket will provide a two day pass for the conference, coffee, snacks, lunch and a goody bag. The goody bag will contain a couple of pens, some chocolate and a coffee mug.

For refreshment tea, coffee and water will be provided at the conference venue. For lunch sandwiches and two small snacks for morning and afternoon will be provided at the conference venue. There will be no food or drink provided for the opening and closing ceremony.

The conference will be mostly attended by people who have had their tickets paid by their employer. Most Australian attendees will be working for companies who are GST registered.

Some people attending the conference will be from outside Australia and will attend the conference for business purposes.

Sponsorship

There are four types of sponsorship packages available for the conference. The sponsors will mostly be from Australian companies and would certainly be GST registered. There will be some sponsorship from other countries.

The sponsorship packages include advertising of the sponsor’s business at the conference’s venue and provision of conference tickets.

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 9-25

A New Tax System (Goods and Services Tax) Act 1999 section 23-5

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.

Question 1 –sale of tickets

Characterisation of supply

Before we determine the GST status of the sale of the tickets we first need to determine the character of the supply.

Where a transaction comprises a bundle of features and acts, it may be necessary to characterise what is supplied to determine whether a particular provision applies in whole or in part.

The characterisation should be undertaken in a manner that is consistent with the object of the particular statutory provision in issue. For example, if a provision specifically requires different treatment of two components of a transaction, this will mean that the two components must necessarily be separately recognised.

According to paragraph 21 in Goods and Services Tax Ruling GSTR 2001/8, you may choose to treat something (or things taken together) as integral, ancillary or incidental if the consideration that would be apportioned to it (if it were a separately identifiable part of a mixed supply) does not exceed the lesser of $3.00 or 20% of the consideration for the total supply.

However, you cannot use the approach in paragraph 21 where a provision of the GST Act specifically requires you to treat a part of a supply in a particular way, regardless of its scale or connection with the supply. For example a supply of food as part of an excursion may otherwise be considered to be integral, ancillary or incidental to the supply of the excursion, but paragraph 38-90(2)(b) of the GST Act specifies that such food will not be GST-free. This means that the consideration for the field trip requires apportionment (paragraph 23 in GSTR 2001/8).

Paragraph 38-3(1)(a) of the GST Act specifies that a supply of food is not GST-free if it is a supply of food for consumption on the premises from which it is supplied. Food is defined in subsection 38-4(1) of the GST Act and includes food for human consumption, beverages for human consumption. Under subsection 38-4(2) of the GST Act beverages includes water.

Attendees when purchasing tickets will receive the following:

Taking into consideration all the facts given and subsection 38-3(1) of the GST Act we consider that there are two distinct supplies that you will make when selling the tickets for the conference:

The next step is to determine the GST status of the two supplies.

GST status of supplies

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 legal services to be a taxable supply.

From the facts given you satisfy paragraphs 9-5(a) and (b) of the GST Act when you make the two supplies as you will make the supplies for consideration and you will make the supplies in the course of a business that carry on.

The next step is to consider the other requirements in section 9-5 of the GST Act.

Paragraph 9-5(c) of the GST Act –supply is connected with Australia

‘Goods’ is defined in section 195-1 of the GST Act as any form of tangible personal property. For GST purposes a supply of drinks and meals is a supply of goods.

A supply of goods is connected with Australia if the goods are delivered or made available in Australia to the recipient of the supply under subsection 9-25(1) of the GST Act.

In this instance, the supply of food for the conference (refreshments, snacks and lunches) is connected with Australia under subsection 9-25(1) of the GST Act as it is made available to the attendees on premises from which it is supplied in Australia.

A supply of drinks and meals for consumption on the premises from which it is supplied in Australia is not an input taxed supply under Division 40 of the GST Act and is not a GST-free supply under paragraph 38-3(1)(a) of the GST Act.

Accordingly, the supply of food to all attendees will be a taxable supply under section 9-5 of the GST Act where you are required to be registered for GST or choose to register for GST.

Where you are not required to be registered for GST and do not choose to register for GST, the supply of food will be outside the scope of GST.

We consider for GST purposes a supply of entry to the conference is a supply of services.

Under subsection 9-25(5) of the GST Act, a supply of things other than goods or real property (such as services) is connected with Australia if:

Your supply will be connected with Australia if any one of the above four paragraphs is satisfied.

Relevant to your supply of entry to the conference is paragraph 9-25(5)(a) of the GST Act.

Paragraph 9-25(5)(a) of the GST Act

Under paragraph 9-25(5)(a) of the GST Act the connection with Australia requires that the 'thing' being supplied is 'done' in Australia.

If the ‘thing’ being supplied is a service, the supply of that service, is typically done where the service is performed.

As the conference will be held in Australia, the supply of entry to the conference is connected with Australia under paragraph 9-25(5)(a) of the GST Act.

However, it is relevant to consider section 9-26 of the GST Act since under this section some supplies that are done in Australia by non-residents are not connected with Australia where the requirements in section 9-26 of the GST Act are satisfied. In this instance, the supply made by the non-resident supplier is outside the scope of GST.

Section 9-26 of the GST Act

Under item 1 in the table in subsection 9-26(1) of the GST Act (item 1) a supply of anything other than goods or real property is not connected with Australia if:

Subsection 9-26(2) of the GST Act defines ‘Australian-based business recipient’ as follows:

Under item 2 in the table in subsection 9-26(1) of the GST Act (item 2), a supply of anything other than goods or real property between non-residents is not connected with Australia if:

From the information received the attendees are Australian residents and non-residents of Australia. They would be employees working for companies who have paid for the tickets.

Australian attendees

Where the Australian attendees are GST registered entities carrying on their businesses in Australia and the acquisition of the tickets is for business purposes the requirements in item 1 and subsection 9-26(2) of the GST Act will be satisfied. In this instance, the supply of entry to the conference to these GST registered Australian businesses is not connected with Australia. The supply is outside the scope of GST and is not included when determining whether you are required to be registered for GST.

You have to ensure that you hold sufficient information before treating your supply to the GST registered Australian businesses as not connected with Australia under item 1. For example you can ask the Australian business to provide in writing its Australian business number (ABN) and whether it is registered for GST.

Where the Australian attendees (businesses and/or individuals) are not registered for GST, the supply of entry to the conference to them is connected with Australia under paragraphs 9-25(5)(a) and/or 9-25(5)(d) of the GST Act. In this case section 9-26 of the GST Act does not apply as the requirements in that section will not be satisfied. The supply of entry to the conference will be subject to GST where you are required to be registered for GST or choose to register for GST since the supply of entry to the conference in Australia is not GST-free or input taxed.

Overseas attendees

Where the overseas attendees are non-residents that carry on a business outside Australia and the acquisition of the tickets is for the purposes of the overseas business, the supply of entry to the conference to the non-residents is not connected with Australia under item 2. The supply is outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

You have to ensure you have sufficient information that the requirements in item 2 are satisfied before treating your supply to these overseas attendees as not connected with Australia. You can refer to Goods and Services Tax Ruling GSTR 2017/1 which provides guidance on what evidence a supplier can hold when making supply to a GST registered Australian business. The link for this ruling is https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20171/NAT/ATO/00001

Where the overseas attendees are non-residents that do not carry on any business activity, the supply of entry to the conference will be connected with Australia under paragraph 9-25(5)(a) of the GST Act. The supply will be subject to GST where you are required to be registered for GST or choose to register for GST since the supply of entry to the conference in Australia is not GST-free or input taxed.

Paragraph 9-5(d) of the GST Act – GST registration

You are required to be registered for GST and must register for GST in Australia if both of the following apply:

If you are not required to be registered for GST you can choose to register for GST.

You reach the GST registration turnover threshold if your:

Your GST turnover is your gross sales revenue excluding sales not connected with Australia and GST you included in sales to your customers.

If your annual GST turnover for supplies that are connected with Australia will be $A75,000 or more you will be required to be registered for the Australian GST. You will elect to register for the Standard GST registration in this instance since you will incur expenses that have GST included in the price.

If you are not required to be registered for GST because your annual turnover for supply connected with Australia is below $A75,000, you can choose to register for the Standard GST registration.

When you register for the Standard GST registration you will be liable to remit the GST collected for the taxable supplies you make and claim back the GST paid on acquisitions that are related to your business activity. You can choose the date for your GST registration at the time you register for GST but the registration cannot be backdated for more than 4 years.

Information on how to register for the standard GST registration and what evidence to provide is available in the fact sheet https://www.ato.gov.au/business/international-tax-for-business/in-detail/doing-business-in-australia/australian-gst-registration-for-non-residents/

The link to apply for an ABN and GST is at https://abr.gov.au/For-Business,-Super-funds---Charities/Applying-for-an-ABN/ABN-for-businesses-outside-Australia/

Summary

You will make two distinct supplies when you sell tickets for the entry to the Sydney conference and the GST status of each supply is:

Where your sale of the tickets for the conference supply is a mixed supply of taxable and non-taxable supplies, you will need to apportion the fees collected for the sale between the taxable and non-taxable supplies. Goods and Services Tax Ruling GSTR 2001/8 which is available at ato.gov.au will be of assistance to you. The link for this ruling is http://law.ato.gov.au/atolaw/print.htm?DocID=GST%2FGSTR20018%2FNAT%2FATO%2F00001&PiT=99991231235958&Life=20140320000001-99991231235959

Question 2 – supply of sponsorships

Characterisation of supply

Taking into consideration all the facts given we consider that there are three distinct supplies that you will make when you supply each of the sponsorship packages to the Australian residents and non-residents of Australia:

The next step is to determine the GST status of the two supplies.

The supply of food to the sponsors at premises in Australia is connected with Australia.

The supply of food will be subject to GST if you are required to be registered for GST or if you choose to register for GST.

Where you are not required to be registered for GST and do not choose to register for GST the supply of food is outside the scope of GST.

The supply of entry to the conference is discussed in question 1. For detailed information on the GST status refer to question 1.

Australian sponsors

You advised that the Australian sponsors will be GST-registered businesses.

Where the supply of entry to the conference is made to GST registered businesses, the supply of the entry is not connected with Australia under item 1 in the table in section 9-26 of the GST Act. The supply will be outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

You have to ensure that you hold sufficient information before treating your supply to the GST registered Australian businesses as not connected with Australia under item 1. For example you can ask the Australian business to provide in writing its Australian business number (ABN) and whether it is registered for GST.

Non-resident sponsors

Where the non-resident sponsors are businesses that carry on their business activity outside Australia, the supply of entry to the conference to them is not connected with Australia under item 2 in the table in section 9-26 of the GST Act. The supply will be outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

You have to ensure you have sufficient information that the requirements in item 2 are satisfied before treating your supply to these overseas attendees as not connected with Australia. You can refer to Goods and Services Tax Ruling GSTR 2017/1 which provides guidance on what evidence a supplier can hold when making supply to a GST registered Australian business. The link for this ruling is https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20171/NAT/ATO/00001

From the facts given you satisfy paragraphs 9-5(a) and (b) of the GST Act when you make the supply of advertising as you will make the supply for consideration and you will make the supply in the course of a business that carry on.

The next step is to consider the other requirements in section 9-5 of the GST Act.

Paragraph 9-5(c) of the GST Act –supply is connected with Australia

We consider for GST purposes a supply of advertising is a supply of services. Relevant to your supply of advertising is paragraph 9-25(5)(a) of the GST Act and section 9-26 of the GST Act

The supply of advertising is connected with Australia under paragraph 9-25(5)(a) of the GST Act. However, it is relevant to consider section 9-26 of the GST Act since under this section some supplies that are done in Australia by non-residents are not connected with Australia where the requirements in section 9-26 of the GST Act are satisfied. In this instance, the supply made by the non-resident supplier is outside the scope of GST.

Section 9-26 of the GST Act

Under item 1 in the table in subsection 9-26(1) of the GST Act (item 1) a supply of anything other than goods or real property is not connected with Australia if:

Subsection 9-26(2) of the GST Act defines ‘Australian-based business recipient’ as follows:

Under item 2 in the table in subsection 9-26(1) of the GST Act (item 2), a supply of anything other than goods or real property between non-residents is not connected with Australia if:

From the information received the sponsors are Australian residents and non-residents of Australia.

Australian sponsors

You advised that the Australian sponsors are GST registered businesses.

Where the Australian sponsors are GST registered entities carrying on their businesses in Australia the requirements in item 1 and subsection 9-26(2) of the GST Act will be satisfied. In this instance, the supply of advertising to these GST registered Australian businesses is not connected with Australia. The supply is outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

You have to ensure that you hold sufficient information before treating your supply to the GST registered Australian sponsors as not connected with Australia under item 1. For example you can ask the Australian business to provide in writing its Australian business number (ABN) and whether it is registered for GST.

Overseas sponsors

Where the overseas sponsors are non-residents that carry on a business outside Australia and the acquisition of the advertising is for the purposes of the overseas business, the supply of advertising to the non-residents is not connected with Australia under item 2. The supply is outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

You have to ensure you have sufficient information that the requirements in item 2 are satisfied before treating your supply of advertising to these overseas sponsors as not connected with Australia. You can refer to Goods and Services Tax Ruling GSTR 2017/1 which provides guidance on what evidence a supplier can hold when making supply to a GST registered Australian business. The link for this ruling is https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20171/NAT/ATO/00001

Summary

You will make three distinct supplies when you supply the four sponsorship packages to the sponsors and the GST status of each supply is:

Supply of food’

The supply of food to the sponsors at premises in Australia is connected with Australia.

The supply of food will be subject to GST if you are required to be registered for GST or choose to register for GST.

Where you are not required to be registered for GST and do not choose to register for GST your supply of food will be outside the scope of GST.

Supply of entry to the conference

Australian sponsors

You advised that the Australian sponsors will be GST-registered businesses

Where the supply of entry to the conference is made to GST registered businesses, the supply of the entry is not connected with Australia under item 1 in the table in section 9-26 of the GST Act. The supply will be outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

Non-resident sponsors

Where the non-resident sponsors are businesses that carry on their business activity outside Australia, the supply of entry to the conference to them is not connected with Australia under item 2 in the table in section 9-26 of the GST Act. The supply will be outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

Supply of advertising

Australian sponsors

You advised that the Australian sponsors are GST registered businesses.

Where the Australian sponsors are GST registered entities carrying on their businesses in Australia the requirements in item 1 and subsection 9-26(2) of the GST Act will be satisfied. In this instance, the supply of advertising to these GST registered Australian businesses is not connected with Australia. The supply is outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

Overseas sponsors

Where the overseas sponsors are non-residents that carry on a business outside Australia and the acquisition of the advertising is for the purposes of the overseas business, the supply of advertising to the non-residents is not connected with Australia under item 2. The supply is outside the scope of GST and will be not included when determining whether you are required to be registered for GST.

Apportionment

Where your supply is a mixed supply of taxable and non-taxable supplies, you will need to apportion the fees collected for the sponsorship between the taxable and non-taxable supplies. Goods and Services Tax Ruling GSTR 2001/8 which is available at ato.gov.au will be of assistance to you.

Question 3

The online payment method is a payment processing method you use to collect payments for the sale of your tickets and will not have any implications to the GST status of your supply of tickets to the attendees.

Where you are registered for the Australian GST and make a taxable sale of more than $A82.50 (including GST), your GST-registered customers need a tax invoice from you to be able to claim a credit for the GST in the purchase price.

If a customer asks you for a tax invoice, you must provide one within 28 days of their request.

For a tax invoice to be valid it needs to include the following:

A tax invoice that includes taxable and non-taxable items – that is, items that are either GST-free or input-taxed – must clearly show which items are taxable. In addition to the standard information the tax invoice must also show:

e-Invoicing

e-Invoicing is the exchange of invoice related documents between a seller and a customer in an electronic format.

A tax invoice does not need to be issued in paper form. You can issue a tax invoice to a customer by means of e-Invoice. This is not limited to, for example, issuing a tax invoice in a PDF format. What is important is that the electronic record transmitted to the customer contains all of the information required for a tax invoice and is readily accessible and easily convertible to English.

Rounding of GST

Where an amount of GST includes a fraction of a cent, special rounding rules apply.

Where there is only one taxable sale on a tax invoice, the amount of GST should be rounded to the nearest cent (rounding 0.5 cents upwards).

Where there is more than one taxable sale on a tax invoice, there are two rules known as the 'total invoice rule' and the 'taxable supply rule':

You and your customer do not need to use the same rounding rules.

For more information on tax invoices refer to:

Question 4

There are two types of GST registration available to non-resident that makes supplies that are connected with Australia:

The Standard GST registration with an ABN is Australia’s full domestic GST system,

If you are a standard GST registrant you:

When you complete your activity statement you will report your taxable sales and your entitlement for your GST refund (GST credits). This GST credits will be offset against your GST liability. If your GST credits are more than your GST liability you will receive a refund. If your GST credits are less than your GST liability, you will need to pay the balance to us when you lodge your activity statement.

In your case you are to elect for the Standard GST registration with an ABN if you want to claim back the GST paid on acquisition related to your business activity. Once registered you will be able to claim back GST credits paid on acquisitions and will have to charge GST for supplies that are connected with Australia.

The fact sheet ‘GST’ (available at https://www.ato.gov.au/Business/GST/ ) will be useful to you as it explains how GST works which includes when to claim GST credits, accounting for GST and lodging the activity statements to report GST and so on.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).