Edited version of your written advice

Authorisation Number: 1012760593960

Ruling

Subject: GST and supply of services to non-residents

Question

Is your supply of services to a non-resident entity GST-free where the non-resident entity engages another Australian entity to coordinate the timing of your services?

Answer

Yes. Your supply of services to the non-resident entity is GST-free provided the other Australian entity does not carry on the business of the non-resident entity in Australia.

Under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (item 2), a supply that is made to a non-resident who is not in Australia when the thing supplied is done is GST-free if:

(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.

For the purpose of item 2, a non-resident company is in Australia if it carries on business (or in the case of a company that does not carry on business, carries on its activities) in Australia:

• through a fixed and definite place of its own for a sufficiently substantial period of time; or

• through an agent at a fixed and definite place for a sufficiently substantial period of time.

You advised that the non-resident entity does not have a presence or a permanent establishment in Australia through which it carries on its business or activities. While the role of the other Australian entity as regards your supply of services to the non-resident is limited to organising the timing of your services, there is not enough information on whether the other entity does other activities that constitute carrying on the non-resident's business. Therefore, if the other entity provides confirmation that it does not carry on the non-resident's business in Australia, the non-resident entity is not in Australia when you supply your services.

Paragraph (a) of item 2 is satisfied as the supply of your services is not a supply of work physically performed on goods as it does not change or affect the goods in a physical way; rather, the supply only changes the location of the goods. Furthermore, the supply of your services is not a supply directly connected with real property situated in Australia.

Accordingly, your supply of services to the non-resident entity is GST-free as it covered by item 2.

Relevant facts and circumstances

You are registered for GST.

You provide services to a non-resident entity. All your services are done in Australia.

The non-resident entity does not have a presence in Australia. It does not have a permanent establishment in Australia through which it carries on its business.

The non-resident entity acquires the services of another Australian entity whose only role is to organise the timing of the services to be provided by you; that is, the other Australian entity will advise you the time and date when your services are required.

You deal directly with the non-resident entity overseas in relation to your supply of services; and issue them an invoice directly.

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 and

A New Tax System (Goods and Services Tax) Act 1999 section 38-355.