Edited version of private advice

Authorisation Number: 1052182228551

Date of advice: 3 November 2023

Ruling

Subject:GST - supply of medical services by a non-resident in Australia

Question

Do you need to charge and pay GST on your supply of medical services as a sole trader and non-resident of Australia?

Answer

No. Your supply of medical services as a sole trader and non-resident of Australia is not connected with Australia under section 9-26 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Therefore, the supply is not a taxable supply under section 9-5 of the GST Act and you are not required to charge GST on your supply of medical services.

This ruling applies for the following period:

Not applicable

The scheme commenced on:

Not applicable

Relevant facts and circumstances

You carry on an enterprise of providing anaesthetic services in Australia and registered for GST.

You currently reside overseas and a non-resident for income tax purposes.

You work in Australia under a special category Visa.

You work in two different roles:

•         As a temporary employee paid via payroll, and

•         As a sole trader contracted by other hospitals.

You generally work where needed in a public hospital for a couple of weeks at time.

You are in Australia for around 3 months and less than 183 days.

You occasionally received work from an agent, and you are free to use any agent.

You are not an employee of this agent and can choose to utilise them to handle paperwork and invoices for the hospital or handle them yourself.

You do not rent any space or consulting rooms when working in Australia as it is not required.

You have no permanent establishment in Australia for the purpose of operating a business.

You will continue to work in Australia for less than 183 days in 12-month period and generally you will be working at the same hospitals. However, this can be changed as you may get contracts from other hospitals.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5, 9-26, 9-27 and 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 11-5, 11-15

A New Tax System (Goods and Services Tax) Act 1999 section 188-15, 188-20

Reasons for decision

Section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that an entity must pay the GST payable on any taxable supply that it makes.

Section 9-5 o the GST Act provides that you will make a taxable supply where the following requirements are met:

a) you make a supply for consideration; and

b) the supply is made in the course or furtherance of an enterprise 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.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

You make your supply of anaesthetic services for consideration, and you are registered for GST. Therefore, your supply will satisfy paragraphs 9-5 (a) and (d) of the GST Act.

Section 9-26 of the GST Act provides that a supply by a non-resident is not connected with Australia if:

(a) the supplier is a non-resident; and

(b) the supplier does not make the supply through an enterprise that the supplier carries on in the indirect tax zone; and

(c) the supply is covered by an item in the table. Item 1 in the table provides that a supply of anything other than goods or real property (an intangible) is not connected with Australia if:

i. the thing is done in Australia; and

ii. the recipient is an Australian-based business recipient of the supply.

According to subsection 9-26 (2) of the GST Act, an entity is an Australian-based business recipient if:

a) the entity is registered; and

b) an enterprise of the entity is carried on in Australia; and

c) the entity's acquisition of the thing supplied is not solely of a private or domestic nature.

You are a non-resident for income tax purposes and your supply of anaesthetic services is done in Australia and the recipients of your supply are hospitals who are registered for GST as an Australian-based business recipients. Therefore, paragraphs 9-26(a) and (c) of the GST Act are satisfied.

Section 9-27 of the GST Act provides when an enterprise is carried on in Australia by a non-resident.

Subsection 9-27(1) of the GST Act provides:

An enterprise of an entity is carried on in Australia if:

a) the enterprise is carried on by one or more individuals covered by subsection (3) who are in Australia; and

b) any of the following applies:

i. the enterprise is carried on through a fixed place in Australia.

ii. the enterprise has been carried on through one or more places in Australia for more than 183 days in a 12-month period,

iii the entity intends to carry on the enterprise through one or more places in Australian for more than 183 days in a 12-month period

Subsection 9-27(3) of the Act provides the following as individuals:

a) if the entity is an individual - that individual;

b) an employee or officer of the entity;

c) ..............

You are an individual performing anaesthetic services in Australia for less than 183 days in a 12-month period and you do not have a fixed place in Australia. You perform your anaesthetic services at various hospitals. You intend to work for less than 183 days in 12-month period in the future, however you may not be working at the same hospitals. Therefore, as a non-resident you do not satisfy subsection 9-27(1) of the GST Act and your supply of anaesthetic services in Australia are not made through an enterprise carried on by you in Australia.

Since your supply is not made through an enterprise carried on by you in Australia, your supply of anaesthetic services does not satisfy paragraph 9-26(b) of the GST Act. A supply should satisfy all of the requirements of section 9-26 of the GST Act to meet the connection rules. Hence your supply is not connected with Australia.

As explained above, you are required to pay GST on any taxable supplies you make. Since, your supplies are not connected with Australia, you are not required to charge GST on your supplies of anaesthetic services.

Additional information:

Current and projected GST turnover

Subsections 188-15(3) and 188-20(3) of the GST Act provide details of supplies that are disregarded when calculating the current and projected GST turnover. Any supplies that are not connected with Australia are not included in working out the current and projected GST turnover. Therefore, the income you received from your supply of anaesthetic services in Australia is not included in working out your GST turnover threshold.

You are not required to be registered for GST if your GST turnover does not meet the GST turnover threshold of A$75,000. Currently, you are registered for GST, and you may choose to be registered for GST even though your supplies are not connected with Australia and not included in working out your GST turnover threshold.

Input tax credit

You are entitled to claim GST credits if you make any creditable acquisition.

Section 11-5 of the GST Act provides that you make a creditable acquisition if:

(a) you acquire anything solely or partly for a creditable purpose; and

(b) the supply of the thing to you is a taxable supply; and

(c) you provide or are liable to provide consideration for the supply; and

(d) you are registered or required to be registered.

Section 11-15 of the Act provides the meaning of creditable purposes. And it says that you acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise. Therefore, you may entitle to claim GST credits on purchases made for creditable purposes.