Edited version of private advice

Authorisation Number: 1052398639624

Date of advice: 21 May 2025

Ruling

Subject: GST and services supplied to a non-resident

Question 1

Is the supply of legal migration services provided by you to a non-resident who is outside Australia at the time of the supply is made, GST-free?

Answer 1

Yes. The supply of legal migration services provided by you to a non-resident who is outside Australia at the time of the supply is made is GST-free under table item 2 of subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

This ruling applies for the following period:

Not applicable

The scheme commences on:

Not applicable

Relevant facts and circumstances

•                You carry on an enterprise of providing legal services including migration services.

•                You have entered into a Client Service Agreement (Agreement) with an individual who lives outside Australia to provide migration service in relation to a partner visa application. (Offshore Partner Visa)

•                The Offshore Partner Visa applicant is not in Australia and the sponsor of the Offshore Partner Visa is an Australian citizen living outside Australia.

•                The partner visa application is lodged electronically (and not on paper) to the Department of Home Affairs in Australia, via the ImmiAccount system/portal used by the Department of Home Affairs.

•                You charge GST on the supply of migration services provided to clients who are located outside Australia as you deem the effective use or enjoyment of the supply to have taken place inside Australia.

•                It is your understanding that the ImmiAccount servers are based in Australia and the visa officers/the Department access data stored in ImmiAccount servers located in Australia in their assessment of the application, therefore your supply of immigration services will not be GST-free

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(3)

Reasons for decision

Goods and Services Tax (GST) is payable on taxable supplies. Under section 9-5 of the A new Tax System (Goods and Services Tax) Act 1999 (GST Act), 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 Australia; 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.

The supply of immigration services would satisfy all of the requirements of a taxable supply. You receive fees for the supply of immigration services; you make the supply in the course of carrying on your enterprise of providing legal services; the supply is connected with Australia as you are carrying on your enterprise in Australia; and you are registered for GST.

The supply of immigration services will not be an input taxed supply under any GST provisions. However, it is relevant to consider whether the supply would satisfy any of the GST-free provision under the GST Act.

GST-free supplies

Section 38-190 of the GST Act lists supplies of things other than goods or real property for consumption outside Australia that are GST-free. The services you supply are neither goods nor real property and therefore come within the scope of subsection 38-190(1) of the GST Act. In particular, table item 2 in subsection 38-190(1) of the GST Act (item 2) is relevant to your circumstances.

Under item 2, a supply is GST-free where it is:

a supply that is made to a non-resident who is not in Australia when the thing supplied is done; and

(a) the supply is 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; or

(b) the non-resident acquires the thing in carrying on the non-resident's enterprise but is not registered or required to be registered.

The requirement that the non-resident in item 2 is not in Australia when the thing supplied is done is a requirement that the non-resident or recipient is not in Australia in relation to the supply when the thing supplied is done. In your circumstances, the supply is made to the offshore entity that does not have an Australian presence and therefore this requirement is met.

'Physically performed on goods situated in Australia'

Under item 2, it is only where the connection between the supply and the goods is a direct one that the location of goods is regarded as the place where consumption occurs. The addition of the adverb 'directly' to the phrase 'connected with' implies a more emphatic connection between the supply and goods. The inference is that the supply is so closely aligned with goods that it is appropriate to treat the location of the goods as the place where consumption occurs.

Goods and Services Tax Ruling: what do the expressions 'directly connected with goods or real property' and 'a supply of work physically performed on goods' mean for the purposes of subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999? (GSTR 2003/7) examines further on the expressions 'directly connected with goods or real property' and 'a supply of work physically performed on goods'.

Paragraphs 33 and 37 of GSTR 2003/7 state:

33. We consider that such a close link or association between the supply and particular goods or real property exists where, for example, the direct object of the supply is the good or real property in the sense that:

•                the supply changes or affects the goods or real property in a physical way; or

•                property; or

•                the supply establishes the quantity, size, other physical attributes or the value of the goods or real property; or

•                the supply affects (or its purpose is to affect) or protects the nature or value (including indemnity against loss) of the goods or real property; or

•                the supply affects, or is proposed to affect, the ownership of the goods or real property including any interest in, or right in or over goods or real property.

37. A common example of a supply of this kind is a supply of a service that is physically performed on particular goods or real property such as the repair of goods or a building.

Paragraph 39 of GSTR 2003/7 further provides examples of supplies where there is a physical interaction with the goods or real property but without changing the goods or real property include supplies of services of the following kind:

•                transport services - the removal of goods from one place to another;

•                security services in relation to goods or real property; and

•                storage services for goods.

It is our view that when you make the supply of immigration services to the non-resident applicant, the supply is not connected or in relation to goods or real property located in Australia. The immiAccount server located in Australia is used to process the offshore partner visa application and the supply made by you does not change or alter the immiAccount server. It is our understanding that the immiAccount is considered as an online platform used for the processing of visa applications.

Your supply of immigration services is related to the processing of an offshore partner visa application and not in relation to any goods located in Australia. Therefore, the supply of migration services will satisfy table item 2a of subsection 38-190(1) of the GST Act.

Limitation of item 2

However, a supply covered by item 2 will not be GST-free if the provisions of subsection 38-190(3) of the GST Act are met. Subsection 38-190(3) of the GST Act provides that the supply will not be GST-free if:

(a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and

(b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia.

The supply of immigration services would satisfy paragraph 38-190(3)(a) of the GST Act as you have entered into an agreement with the non-resident entity. However, the supply would not satisfy paragraph 38-190(3)(b) of the GST Act as the agreement does not require you to provide the services to another entity in Australia.

Therefore, subsection 38-190(3) of the GST Act does not negate the GST-free status under item 2.

Additional information

Supplies made through an agent

If a supply of service is made to a non-resident entity through an agent in Australia, the supply of service would be GST-free under item 2.

Goods and Services Tax Ruling: the scope of subsection 38-190(3) and its application to supplies of things (other than goods or real property) made to non-residents that are 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 (GSTR 2005/6) provides the following example in relation to a supply of immigration services provided to a non-resident entity through an agent in Australia.

Paragraphs 471 to 476 of GSTR 2005/6 provides:

471. Sometimes a non-resident entity makes an acquisition through a resident agent. If all the agent does is to arrange, on behalf of the non-resident, for the supply to be made and provided to the non-resident, the supply is not provided to the resident agent in Australia.

Example 19 - Australian barrister engaged by an Australian solicitor who is acting as agent of a non-resident individual

472. An Australian solicitor acting as agent for a non-resident individual engages an Australian barrister to supply legal services to the non-resident individual on an immigration matter. The individual is not in Australia when the legal services are performed and the supply is not directly connected with real property situated in Australia.

Item 2

473. The supply of legal services by the barrister is made to the non-resident individual (principal) through the solicitor, as agent for the non-resident. The presence in Australia of the solicitor does not mean that the non-resident individual is in Australia for the purposes of item 2.84 The supply by the barrister to the non-resident individual meets the requirements of item 2.

Subsection 38-190(3)

474. The supply of legal services by the barrister to the non-resident individual is a supply under an agreement entered into indirectly with a non-resident (that is, through the resident agent). Paragraph 38-190(3)(a) is therefore satisfied.

Provided to another entity

475. What is being supplied is advice on immigration matters concerning the non-resident individual. The barrister has been engaged by the Australian solicitor to provide advice to the non-resident individual. The legal services are provided to the non-resident, not the agent. The supply by the barrister to the non-resident individual is both made and provided to the non-resident, through the solicitor as agent. The supply by the barrister is neither made nor provided to the solicitor.

476. Subsection 38-190(3) does not apply to the supply of the legal services provided by the barrister.

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