| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012953908719
Date of advice: 3 February 2016
Ruling
Subject: GST and supplies in relation to the training of a work placement
Question
Is goods and services tax (GST) applicable to the supplies you make to a non-resident entity in relation to the training of a work placement?
Advice
Yes, GST is applicable to the supplies.
GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if:
(a) you make the supply for consideration;
(b) the supply is made in the course of an enterprise that you carry on;
(c) the supply is connected with the indirect tax zone (Australia), and
(d) you are 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.
Under the agreement with the non-resident entity, you are making supplies in relation to the training of a work placement which include: office space, office facilities and materials, and training services.
A supply of office space is a supply of real property. A supply of real property in Australia is a taxable supply under section 9-5 of the GST Act. Accordingly, the supply of office space is a taxable supply under section 9-5 of the GST Act.
A supply of office facilities and materials is a supply of goods. A supply of goods that is delivered and consumed in Australia is a taxable supply under section 9-5 of the GST Act. Accordingly, the supply of office facilities and materials is a taxable supply under section 9-5 of the GST Act.
A supply of training services in Australia that is made to a non-resident entity is not GST-free under subsection 38-190(3) of the GST Act where, the agreement entered directly or indirectly with the non-resident entity requires the training to be provided to another entity in Australia. In this instance, the supply of training services is provided to the placement officer at the request of the non-resident entity and therefore is not a GST-free supply under subsection 38-190(3) of the GST Act. The supply of the training services is a taxable supply under section 9-5 of the GST Act
To summarise the supplies in relation to the training of a work placement which include: office space, office facilities and materials and training services are taxable supplies under section 9-5 of the GST Act as all the requirements in that section are satisfied. GST is therefore payable on the supplies.
Relevant fact
You are an Australian entity and registered for GST.
You have accepted a proposal from a non-resident entity for an official temporary placement of an employee of the non-resident entity with your company for a specific period. You will be paid a training fee for the employee's placement.
During the placement the employee will undertake some research. You will provide the employee with office space and access to office facilities and materials during the period of placement. The employee will also have access to your staff as may be required in the course of the research.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5