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Edited version of your written advice
Authorisation Number: 1012830388613
Date of advice: 26 June 2015
Ruling
Subject: GST and international services
Question
Is GST payable on the supply of your services to Company X in accordance with the vendor agreement?
Answer
No. GST is not payable on the supply of your services to Company X as outlined in the vendor agreement.
The supply is 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 (GST Act) (item 2). This is because:
• the supply your services is made to Company X, a company that is not a resident of Australia for income tax purposes and that does not carry on a business in Australia either on its own or through an agent
• the supply of your services is neither a supply of work physically performed on goods situated in Australia nor a supply directly connected with real property situated in Australia
• Company X is neither registered nor required to be registered for GST in Australia and
• the supply of your services does not involve a supply of a right or option to acquire another thing; does not relate to making input taxed supplies of real property; and there is no agreement with Company X to provide your services to another entity in Australia.
Relevant facts and circumstances
You are registered for GST.
You have entered into an agreement with an overseas based company, Company X, whereby they will pay you a booking commission for activities that are booked from a website that you are developing.
You have provided a copy of a Vendor Agreement which includes the following information:
• You will market Products supplied by Company X through the internet in return for a Fee.
• You will market the Products to your customers through a co-branded Company X website.
• Your customers will receive the same benefits and same level of service as any other Company X customer.
• Company X will make available to you a co-branded Company X website which you may link to your website. By utilizing this co-branded Company X website your customers shall be able to purchase the Products from Company X suppliers.
• You shall offer the Products at Company X supplier's recommended retail prices. All booking requests from your customers are subject to acceptance by Company X.
• Company X shall pay you the commission based on the gross selling price of the supplier's Product.
• The agreement is made and entered into in Country X and Country X law applies. Company X and you are independent contractors and nothing in the agreement shall be construed as a partnership or joint venture. This is merely an agreement to refer customers to the Products in consideration for a Fee.
The information available to you indicates that Company X conduct, all their business operations from Country X and they do not carry on a business of their own or through an agent in Australia. In addition, they are not residents of Australia for income tax purposes and are neither registered nor required to be registered for GST 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 Subsection 38-190(1).
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(2).
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-190(3).