Edited version of private advice

Authorisation Number: 1051617090171

Date of advice: 4 December 2019

Ruling

Subject: GST and supplies made to a non-resident

Question 1

Are the supplies which you make to SSS in its capacity as agent for TTT under an agreement (the Agreement) GST-free supplies under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

All further legislative references are the GST Act unless otherwise stated.

Answer

Yes. The supplies which you make to SSS in its capacity as agent for TTT under the Agreement are GST-free supplies under section 38-190. This is because the supplies are considered to fall within item 2 in the table to subsection 38-190(1) and are not subject to the exception set out under subsection 38-190(3).

Question 2

Are the acquisitions of advertising and media services which you make in order to provide services to SSS in its capacity as agent for TTT creditable acquisitions under section 11-5?

Answer

Yes. The acquisitions of advertising and media services which you make in order to provide services to SSS in its capacity as agent for TTT are creditable acquisitions under section 11-5 on the basis that; the acquisitions will be acquired for a creditable purpose within the meaning of section 11-15; the supplies of the advertising and media services are taxable supplies to you; you are registered for GST; and you will be liable to provide the consideration for the acquisitions.

Relevant facts and circumstances

SSS, a US communications/advertising company, acts as agent for TTT, a Japanese company.

Both SSS and TTT are non-residents.

You are registered for GST.

SSS and TTT are not registered for GST.

SSS entered into an agreement with you (the Agreement) to appoint you to plan and purchase national and local broadcast media time and digital media on behalf of TTT in the Australian market.

Under the Agreement:

·         you are referred to as 'Agency'; and

·         TTT is referred to as 'the Client'.

With regard to the nature and scope of the agency authority that is in place between TTT and SSS, TTT has given SSS a broad authority to develop and execute a media strategy. The scope of the authority is sufficiently broad enough to permit SSS to enter into the Agreement to acquire your services as an agent on behalf of TTT.

You have been engaging directly with SSS in relation to the development and implementation of the media strategy.

The Agreement stipulates terms that concern your services, the scope of work, and deliverables.

SSS as agent for TTT and ultimately TTT will control the provision of the services, over material released to the media and in relation to the taking of action.

TTT has a subsidiary in Australia and its subsidiary may be consulted from time to time due to its subsidiary's knowledge of the Australian market. However TTT will control the way in which the services are provided by you.

TTT requires the services from you as it is running an advertising campaign in relation to an event.

In delivering the services to SSS (as agent for TTT), you will make a number of acquisitions of advertising and media services from Australian suppliers who are registered for GST.

The acquisitions of advertising and media services made by you will be acquired for a creditable purpose within the meaning of section 11-15. This is because the acquisitions will be acquired by you in carrying on your enterprise and will not relate to the making of supplies that would be input taxed, or be of a private or domestic nature.

The supplies of the advertising and media services are taxable supplies to you.

The advertising and media services will be purchased by and invoiced to you, and you will be liable to provide the consideration.