Edited version of your written advice

Authorisation Number: 1012989073425

Date of advice: 29 March 2016

Ruling

Subject: GST and supply of publications from overseas

Question 1

Will goods and services tax (GST) be applicable to your supply of publications from overseas to Australian clients?

Advice

No. GST will not be applicable to your supply of publications from overseas to Australian clients as the supply of the publications is not connected with Australia and therefore, is not a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Question 2

Will you be required to remain registered for the Australian GST when you will carry on your business overseas?

Advice

No. You will not be required to remain registered for the Australian GST when you will carry on your business overseas. This is because you will not be required to be registered for GST under section 23-5 of the GST Act since the supplies made from overseas will not be connected with Australia and therefore, not included in the calculation of your GST annual turnover.

Relevant fact

You carry on a business in Australia and are registered for the Australian GST.

You are considering to move overseas and to carry on your business in that country.

Your business in that overseas county will comprise of supplying publications to your current subscribers in Australia and to any new subscribers. You will also be continuing to grant access to the electronic versions and providing e-updates to the e-books.

About half of your clients will receive the print versions. You will supply new books to new subscribers, but this component will be a very small part of the business as most subscribers subscribe electronically. No book that will be mailed to Australia will be worth $1,000 or more. You will not have any employees, contractors or business establishments when you carry on your business overseas.

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 9-25

A New Tax System (Goods and Services Tax) Act 1999 section 23-5

Detailed reasoning

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

Questions 1 and 2

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

a) make 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 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.

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

You will be supplying the publications for consideration and the supply will be made in the course of the business that you will carry on overseas. In this instance paragraphs 9-5(a) and 9-5(b) of the GST Act will be satisfied.

Paragraph 9-5 (c) of the GST Act

This paragraph requires that the supply of the publications to be connected with Australia in order to satisfy the requirements of a taxable supply.

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.

A supply of goods is a supply of any form of tangible personal property, that is, any form of personal property that has a physical existence but does not include intangible personal property for example e-books.

You will be supplying the publications to the Australian clients either by mail or/and electronically. In this instance when you mail the publications you will be making a supply of goods and when supplying the publications electronically you will be making a supply of anything other than goods or real property.

Supply of goods

Under section 9-25 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 (subsection 9-25(1)); or

• The supply of goods involves the goods being removed from Australia (subsection 9-25(2)); or

• 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 (subsection 9-25(3)).

In the context of subsection 9-25(1) of the GST Act, goods are delivered in Australia if the goods are physically delivered in Australia. Goods are made available in Australia if the goods are physically made available in Australia.

Goods which are delivered or made available to the recipient may be goods that the supplier has acquired domestically or imported. Also an overseas supplier may make a supply of goods that is wholly within Australia. For example, an overseas supplier may acquire goods in Australia and supply those goods to a recipient in Australia.

Where the recipient imports the goods into Australia, the supply of goods is not connected with Australia under subsection 9-25(1) of the GST Act because the goods are not delivered or made available in Australia to the recipient of the supply.

According to the fact sheet 'GST and imported goods' if goods are sent to Australia by international post, the addressee for the low value goods is considered to be the importer of the low value goods as generally they are the entity that the Australian Customs and Border Protection Service (ACBPS) would release the goods to.

You will mail the publications to the Australian clients and the value of the publications will be less than $A1,000. In this instance, your supply of low value publications to the Australian clients will not be connected with Australia as:

• the publications will not be delivered or made available in Australia to the Australian clients as it is the Australian clients who will be importing the low value publications in Australia;

• the publications will not be removed from Australia since you will mail them from overseas; and

• your supply will not involve you importing the low value publications in Australia since it will be the Australian clients who will be the importer of the low value goods. Further you will not be installing or assembling the publications in Australia.

Supply of anything other than goods or real property

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; or

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

c) All of the following supply:

i. Neither paragraph (a) nor (b) applies in respect of the thing;

ii. The thing is a right or option to acquire another thing;

iii. The supply of the other thing would be connected with Australia.

You will be supplying the publications electronically from overseas. In this instance your supply to the Australian clients will not be connected with Australia as:

• the supply of the publications will not be done in Australia since you will email them from overseas;

• you will not make the supply through a business that you carry on in Australia; and

• the supply of the publication is not a supply of right or option to acquire another thing, the supply of the other thing would be connected with Australia.

Summary

Your supply of publications by mail or electronically from overseas to Australian clients will not be connected with Australia. Paragraph 9-5 (c) of the GST Act will therefore not be satisfied.

For more information on 'supply connected with Australia' refer to the Goods and Services Tax public ruling GSTR 2000/31 which is available from the legal database of www.ato.gov.au

Paragraph 9-5(d) of the GST Act

Under section 23-5 of the GST Act you are required to be registered for GST if:

a) you are carrying on an enterprise; and

b) your GST turnover meets the registration turnover threshold which currently is $75,000 and $150,000 for non-profit organisation.

Under subsections 188-15(3) and 188-20(3) of the GST Act, supplies that are not connected with Australia are disregarded when calculating the current and projected GST annual turnovers.

You will satisfy this paragraph as currently you are registered for GST.

However, when you will start carrying on your business overseas and making your supplies from overseas, you will not be required to be registered for GST as your supplies from overseas will not be connected with Australia and therefore, will not be included in the calculation of your current and projected GST annual turnover. In this instance you can cancel your GST registration as you will not be required to be registered for GST. Accordingly, where you cancel your GST registration this paragraph will not be satisfied.

For more information on GST turnover refer to the GST public ruling GSTR 2001/7 which is available from the legal database of www.ato.gov.au

Summary

Your supply of publications from overseas to Australian clients will not be subject to GST as your supply will not be a taxable supply under section 9-5 of the GST Act.

Other information

When you cease business in Australia you need to cancel your ABN and GST registration. Before doing this, make sure you have met all your lodgement, reporting and payment obligations such as lodging your activity statements.

Cancellation of GST registration and ABN can be done by phoning 13 28 66 between 8.00a.m and 6.00p.m Monday to Friday.

We recommend that you refer to the fact sheet 'selling or closing your business' which is available at www.ato.gov.au before you cancel your ABN and GST registration as it provides guidance what tax matters you may need to deal with when you stop operating your business in Australia.