• Legal database
Legal database
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This edited version has been archived due to the length of time since original publication.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: 1012901263514

Date of advice: 27 October 2015

Ruling

Subject: GST and commission

Question

What is the goods and services tax (GST) status of the commission you received when you acted as an advisor to Australian vendors in regard to the sale of the good?

Answer

The commission you received is consideration for a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you acted as an advisor to Australian vendors in regard to the sale of the good.

GST is payable on a taxable supply. Under section 9-5 of the GST Act a supply is a taxable supply if:

    a) the supplier makes 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) the supplier is registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

All the requirements in section 9-5 of the GST Act must be satisfied for a supply to be a taxable supply.

You acted as an advisor to the vendors and introduced them to a third party in regard to the sale of the good. In this instance you made a supply of services to the vendors and your supply satisfied all the requirements in section 9-5 of the GST Act as:

    • the commission you received was consideration for the supply of services you made to the vendors;

    • the supply was made in the course of an enterprise (business) that you carry on;

    • the supply was connected with Australia as the services were done in Australia;

    • you are registered for GST; and

    • there is no provision under the GST Act that makes your supply of services to the vendors GST-free or input taxed.

Accordingly, your supply was a taxable supply under section 9-5 of the GST Act and the commission was consideration for a taxable supply. You are liable to pay GST for the supply made to the vendors.

Note: Where the term 'Australia' is used in this document, it is referring to the 'indirect tax zone' as defined in subsection 195-1 of the GST Act.

Relevant facts and circumstances

You are registered for GST and acted as an advisor to Australian residents, in regard to the sale of a good.

The Australian residents contacted you as they wanted to sell a good to public buyers either within or outside Australia. You introduced the Australian residents to a third party for the sale of the good and they agreed that you will receive a commission for your service to them.

The Australian residents as vendors entered into an agreement with the third party under which they granted the third party exclusive right to offer and sell the good. The third party retained a buyer's premium and the vendors acknowledged that the third party will share the buyer's premium with you.

The third party sold the good and confirmed they had paid to you your share of commission.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5


Back to top