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This edited version has been archived due to the length of time since original publication.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: 1012969868351

Date of advice: 17 February 2016

Ruling

Subject: GST and supplies of goods and services made by a non-resident identity

Question

Is the supply of goods and services made by the non-resident entity to an Australian entity connected with the indirect tax zone (Australia) for the purposes of paragraph 9-5(c) of the New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Advice

No. The supply of goods and services made by the non-resident entity to the Australian entity is not connected with Australia for the purposes of paragraph 9-5(c) of the GST Act as the supply of goods and services does not satisfy the requirements in section 9-25 of the GST Act.

Relevant fact

You are a company incorporated outside Australia and a non-resident of Australia. You do not have a presence or a permanent establishment in Australia and are not registered for the Australian GST.

You have entered into an agreement with an Australian entity for the provision of goods and services to another entity located outside Australia. None of the goods to be supplied to the overseas entity are sourced or supplied from Australia.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-25

Detailed reasoning

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.

The concept of supplies 'connected with Australia' is relevant to determining whether a supply is a taxable supply and subject to GST.

Section 9-25 of the GST Act defines when a supply is connected with Australia. For the purposes of determining whether a supply is connected with Australia, section 9-25 of the GST Act makes a distinction between a supply of goods, a supply of real property and a supply of anything other than goods or real property.

You are providing goods and services to an overseas entity under the Agreement you have with the Australian entity.

Supply of goods

Under subsections 9-25(1), (2) and (3) of the GST Act, a supply of goods is connected with Australia if:

    • the goods are delivered or made available in Australia to the recipient of the supply;

    • the supply of goods involves the goods being removed from Australia;

    • the supply of goods involves the goods being brought to Australia and the supplier either imports the goods into Australia or installs or assembles the goods in Australia.

You advised that you deliver the goods to the overseas entity and none of the supplied goods are sourced from Australia. In this instance, your supply of goods to the overseas entity is not connected with Australia.

Supply of services

Under subsection 9-25(5) of the GST Act, a supply of anything other than goods or real property is connected with Australia if:

    a) the thing is done in Australia;

    b) the supplier makes the supply through an enterprise that the supplier carries on in Australia; or

    c) all of the following apply:

    (i) neither paragraph 9-25(5)(a) nor (b) applies in respect of the thing;

    (ii) the thing is a right or option to acquire another thing; and

    (iii) the supply of the other thing would be connected with Australia

Goods and Services Tax Ruling GSTR 2000/31 provides guidance on when a supply is connected with Australia. According to paragraph 65 of GSTR 2000/31 if the 'thing' being supplied is a service, the supply of that service is typically done where the service is performed. If the service is performed in Australia, the service is done in Australia and the supply of the service is connected with Australia under paragraph 9-25(5)(a) of the GST Act. This is the case even if the recipient of the supply is outside Australia.

From the information received your supply of services to the overseas entity does not satisfy any of the requirements in subsection 9-25(5) of the GST Act as:

    a) your supply of services to the overseas entity are done outside Australia;

    b) you make your supply of services through an enterprise that you carry on outside Australia; and

    c) your supply is not a supply of a right or option to acquire some other thing where the supply of the other thing would be connected with Australia.

Accordingly your supply of services to the overseas entity is not connected with Australia.

Summary

Under the Agreement you have with the Australian entity, your supply of goods and services to the overseas entity is not connected with Australia under section 9-25 of the GST Act.


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