Edited version of private advice

Authorisation Number: 1051996237958

Date of advice: 30 June 2022

Ruling

Subject: GST and income from a social media platform

Question 1

Are you required to be registered for GST?

Answer

No, you are not required to be registered for GST.

Question 2

Are payments received from a social media platform subject to GST?

Answer

No, payments received from the social media platform are not subject to GST.

Relevant facts and circumstances

You carry on an enterprise under a contract with a social media platform under which you get paid by the social media platform.

You have also generated income of less than $XX from a small merchandise website. Other than this you do not earn income from any other sources.

The social media platform operator is a non-resident and is not in Australia.

You are currently not registered for GST.

Your current and projected income has not reached the GST registration turnover threshold.

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 1999section 38-185

A New Tax System (Goods and Services Tax) Act 1999section 195-1

Reasons for decision

Detailed reasoning

1.    Are you required to be registered for GST?

Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 states:

You are required to be registered under this Act if:

(a)  You are * carrying on an *enterprise; and

(b)  Your * GST turnover meets the * registration turnover threshold.

Note: it is the entity that carries on the enterprise that is required to be registered (and not the enterprise).

(Terms marked with asterisks (*) are defined in section 195-1 of the GST Act).

Enterprise

Your activities undertaken under the social media platform agreements come within the definition of an enterprise under section 9-20 of the GST Act.

Registration turnover threshold

Section 188-10 of the GST Act is relevant for working out whether your GST turnover meets, or does not exceed, a particular turnover threshold.

You have a GST turnover that meets a particular turnover threshold under subsection 188-10(1) when:

•         your current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold; or

•         your projected GST turnover is at or above the turnover threshold.

The registration turnover threshold is $75,000.

Section 188-5 defines 'current GST turnover.' Subject to certain exclusions, 'current GST turnover' at any time during a particular month is the sum of the values of all the supplies that you made, or are likely to make during the current month and the preceding 11 months.

Section 188-20 defines 'projected GST turnover.' Subject to certain exclusions, 'projected GST turnover' at a time during a particular month is the sum of the values of all the supplies that you made, or are likely to make, during that month and the next 11 months.

Based on your current and projected GST turnover figures, you do not meet the GST registration threshold and have not satisfied the requirements under section 23-5 of the GST Act. As such, you are not required to be registered for GST.

If your enterprise does end up reaching a GST turnover of $75,000 or more you will need to register within 21 days of your GST turnover exceeding the relevant threshold. As you have not met this threshold yet, registering for GST is optional. If you choose to register, generally you must stay registered for at least 12 months.

2.    Are the payments received from the social media platform subject to GST?

To address this issue, the first step is to identify the nature of the supply you make to the social media platform.

The term 'supply' is defined in subsection 9-10(1) of the GST Act as 'any form of supply whatsoever' and includes a creation, grant, transfer, assignment or surrender of any right (paragraph 9-10(2)(e) of the GST Act). This definition requires an entity, the supplier to make the supply and general another entity, the recipient to acquire the supply.

The Commissioners' views on supplies are outlined in several goods and services tax rulings. Goods and Services Tax Ruling GSTR 2006/9, Goods and services tax: supplies provides ten propositions that are considered relevant in analysing a transaction in relation to a supply.

Proposition 11 detailed in GSTR 2006/9 provides that the agreement is the logical starting point when working out the entity making the supply and the recipient of that supply.

Therefore, to determine the nature of the supply regard must be given to the terms and conditions set out in the social media platform's contract.

As you are not required to be registered for GST under section 23-5 of the GST Act and are not currently registered GST, you do not have to charge GST on the supplies you make.

If you do end up being required to register for GST or choose to register for GST, we consider that you make a supply to the social media platform and this supply is a GST-free supply under item 2 in the table in subsection 38-190(1) of the GST Act.