Edited version of private ruling

Authorisation Number: 1011509143638

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: GST registration

Are you required to register for the goods and services tax (GST) where your supply of services is done overseas?

Answer:

Based on the information received, yes, you are required to be registered for GST where your supply of services is done overseas.

Relevant facts and circumstances

You are an Australian resident for tax purposes. You carry on a business as a sole trader and have an Australian Business Number (ABN) registered with the Australian Taxation Office. You currently are not registered for GST.

You provide consultation, advisory, information and project implementation services.

You have a contract with an Australian company and you advise that in this contract you are required to provide your services to an overseas company.

You have to travel overseas to perform your services.

Your expected turnover for the financial year 2010-2011 will exceed the GST threshold of AUD75,000.

Detailed reasoning

Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you are required to be registered for GST if:

you carry on an enterprise; and

your GST turnover meets the GST registration turnover threshold of $75,000 ($150,000 for non-profit body).

If you do not satisfy one or more of these requirements for example, if you do not make supplies connected with Australia, or your current or projected GST turnover from supplies that are connected with Australia is less than the registration turnover threshold you are not required to register for GST in Australia.

Further, if your turnover does not meet the registration threshold you are not required to be registered for GST. However, you may choose to register for GST if you are carrying on an enterprise under section 23-10 of the GST Act.

GST turnover

Division 188 of the GST Act defines GST turnover. GST turnover is defined by reference to current GST turnover and projected GST turnover.

Your current GST turnover is the GST exclusive value of all the supplies you make or likely to make in the current month plus all the supplies you made in the previous 11 months.

Your projected GST turnover is the GST exclusive value of all the supplies made in the current month plus all the supplies you are likely to make in the next 11 months.

If your projected GST turnover meets or exceeds the turnover threshold then you are required to register for GST even if your current GST turnover is below the threshold.

The following supplies are excluded from the calculation of current GST turnover and projected GST turnover:

· supplies that are input taxed (for example supply of residential premises);

· supplies that are not for consideration;

· supplies not made in connection with an enterprise that you carry on;

· supplies that are not connected with Australia;

supplies that are connected with Australia because these supples were neither done in Australia, nor supplied through an enterprise that is carried on in Australia and are supplies of a right or option to acquire another thing and the supply of the other thing would be connected with Australia;

supplies (other than those mentioned in the immediately preceding two dot points) of a right or option to use commercial accommodation in Australia where the supplies are not made in Australia and are made through an enterprise that the supplier does not carry on in Australia; and

supplies made from one member of a GST group to another member of that GST group.

Goods and Services Tax Ruling GSTR 2001/7 provides guidance to the relevance of annual and projected GST turnover to an enterprise. This ruling can be downloaded from the Australian Taxation Office's website at www.ato.gov.au.

Are you required to be registered for GST?

From the information received you will satisfy section 23-5 of the GST Act and therefore required to be registered for GST as:

you are carrying on an enterprise (business); and

your supplies are connected with Australia as they are made through an enterprise you carry on in Australia. Accordingly, these supplies are included when calculating your current and projected turnover. You advised that your projected turnover for the 2010/2011 financial year in regard to the supplies of services you make will be above the GST registration threshold of $75,000. You therefore satisfy the GST threshold requirement to register for GST.

You can register for GST online at the Australian Business Register's website at www.abr.gov.au or by completing a paper form or through your tax agent.

If you are registered for GST, you may be able to claim back from the Australian Taxation Office the GST you have paid on acquisitions you have made in carrying on your enterprise. However, you are also liable to remit GST to the Tax office on any taxable supplies that you make.