Edited version of private advice

Authorisation Number: 1052216128493

Date of advice: 25 January 2024

Ruling

Subject: Non-resident running a commercial event in Australia

Question 1

Are you required to be registered for GST under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999?

Answer

Yes, you are required to be registered for GST.

Question 2

Are you making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 when you sell an on-site ticket to a meeting to an Australian resident who is attending in a private capacity?

Answer

Yes. The sale of a ticket is a taxable supply.

This ruling applies for the following periods:

All tax periods after the 1 July 20XX

Relevant facts and circumstances

You are a non-resident.

You carry out activities where you run week long events globally.

You are running an event in Australia that you are selling tickets to.

You do not have an office in Australia, nor do you have an agent in Australia and you do not carry on any other activities from a fixed place in Australia.

Through your representatives or employees, you will only be in Australia for approximately 14-16 days to host the event.

The majority of attendees to the event are Australian residents who are attending in a private capacity.

It is estimated that the tickets sales for the event will be greater than $75,000.

You will be registered for GST.

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

A New Tax System (Goods and Services Tax) Act 1999 section 25-1

A New Tax System (Goods and Services Tax) Act 1999 section 188-10

Reasons for decision

An entity that carries on an enterprise (for example, operates a business or similar) is required to register for GST if its annual turnover exceeds the specific turnover threshold. Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)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).

Carrying on an enterprise

The term 'enterprise' is defined in section 9-20 of the GST Act and paragraph 6 of the Goods and Services Tax Determination GSTD 2006/6: Does MT 2006/1 have equal application to the meaning of 'entity' and 'enterprise' for the purposes of the A New Tax System (Goods and Services Tax) Act 1999? explains that an enterprise includes an adventure or concern in the nature of trade:

6. An enterprise is defined as an activity or series of activities done in a certain manner or by certain entities. The activities covered include those done in the form of a business or an adventure or concern in the nature of trade, ....

Paragraph 13 of GSTD 2006/6 also explains that an adventure or concern in the nature of trade does not need to be a business to have the characteristics of a business deal.

13. An adventure or concern in the nature of trade includes a commercial activity that does not amount to a business but which has the characteristics of a business deal.

Your event and ticket sales are a commercial activity as the event has the characteristics of a business deal. Therefore, your activity of hosting the event in Australia constitute carrying on an enterprise for GST purposes.

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:

(a)          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

(b)          your projected GST turnover is at or above the turnover threshold.

The registration turnover threshold is $75,000.

Section 188-15 of the GST Act defines 'current GST turnover.' Your current GST turnover at a time during a particular month is the sum of the values of all the supplies that you have made, or are likely to make, during the 12 months ending at the end of that month, subject to certain exclusions.

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

Both current and projected GST turnover exclude:

•                     supplies that are input taxed; or

•                     supplies that are not for consideration (and are not taxable supplies under section 72-5); or

•                     supplies that are not made in connection with an enterprise that you carry on.

The ticket sales are made for consideration in connection with the enterprise you carry on and there in no provision in the legislation where this could be input taxed.

Your projected turnover for this month and the next 11 months is greater than AUD75,000 which exceeds the registration threshold. Therefore, as you are carrying on an enterprise and you have exceeded the GST registration turnover and must register for GST.

Question 2

Detailed Reasoning

Taxable Supplies

GST is payable on taxable supplies. Section 9-5 of the GST Act states you make a taxable supply if:

(a)          you 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; 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.

When you sell a ticket to your event, you are making a supply for consideration. The sale of a ticket is in the course or furtherance of the enterprise, and you are required to be registered for GST.

Subsection 9-25(5)(a) of the GST Act states supply of anything other than goods or real property is connected with the indirect tax zone (Australia) if the thing is done in the indirect tax zone. Given that the event is being held in Australia, the event is 'done' in the indirect tax zone and therefore the supply is connected to the indirect tax zone.

Consequently, the supply of an on-site ticket to an Australian resident who is attending in a private capacity to attend your event satisfies paragraphs (a) to (d) of section 9-5 of the GST Act outlined above and is subject to GST.