Edited version of private advice

Authorisation Number: 1052368002597

Date of advice: 5 March 2025

Ruling

Subject: GST and supplies to non-residents

Question 1

Is the income received from a non-resident Entity X in relation to posting videos on their website subject to goods and services tax (GST)?

Answer 1

No, the supply that you make to the non-resident Entity X is a GST-free supply under paragraph (a) of table item 2 of subsection 38-190(1) of the GST Act.

Question 2

If it does apply, does it apply to all income generated through the non-resident Entity X or only income generated through Australian viewers/listeners?

Answer 2

You supply advertising space on the non-resident Entity X's website. While the viewers/listeners are the end consumers of the advertisements, the supply of advertising space is provided to the non-resident Entity X. Consequently, this supply is made to a non-resident entity, making it GST-free under paragraph (a) of table item 2 of subsection 38-190(1) of the GST Act.

This ruling applies for the following periods:

Not applicable

The scheme commences on:

Not applicable

Relevant facts and circumstances

You post videos on a non-resident entity's website and receive income through advertisements played before and during the videos.

You do not receive invoices or receipts from the non-resident entity on the income.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(1) and (3)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(3)

Reasons for decision

Question 1

Generally, GST is payable on a taxable supply. However, a supply is not a taxable supply to the extent that it is GST-free.

There is a contractual relationship between you and the non-resident Entity X to display advertisements on their website when your videos are watched by viewers. The non-resident Entity X is responsible for placing the advertisements and collecting payments from the advertisers. You receive payments for allowing the non-resident Entity X to display the advertisements when your video content is watched by viewers on their website. Therefore, we take the view that you make a supply to the non-resident Entity X by way of making available for advertisements placed through them.

GST-free supply

Table item 2 of subsection 38-190(1) of the GST Act (item 2) provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if the non-resident is not in Australia when the thing supplied is done, and:

a)            the supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia; or

b)            the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered or required to be registered for GST.

Only one of the paragraphs in item 2 needs to be satisfied.

From the information given, paragraph (a) of item 2 is satisfied when you make your supply to non-resident Entity X as:

•                     your supply is made to a non-resident who is not in Australia in relation to your supply when the supply is done; and

•                     your supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia.

Accordingly, your supply to the non-resident Entity X is GST-free under paragraph (a) of item 2 to the extent that the supply is not negated by subsection 38-190(3) of the GST Act.

Subsection 38-190(3) of the GST Act

Subsection 38-190(3) of the GST Act provides that without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if:

a)            it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and

b)            the supply is provided, or the agreement requires it to be provided to another entity in Australia; and

c)             for a supply other than an input taxed supply - none of the following applies:

                              i.                the other entity would be an Australian-based business recipient of the supply, if the supply had been made to it;

                             ii.                the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or

                            iii.                the other entity is an individual who is provided with the supply as an employee or officer of the recipient, and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense.

From the facts given, subsection 38-190(3) of the GST Act does not apply to your supply made to the non-resident Entity X as you are not required to provide your supply to another entity in Australia.

Your supply is made and provided to the non-resident Entity X. Your supply to non-resident Entity X is therefore GST-free under paragraph (a) of item 2.

Question 2

You supply advertising space on the website of non-resident Entity X. While the viewers/listeners are the end consumers of the advertisements, the advertising space is provided to the non-resident Entity X. Consequently, this supply is made to a non-resident entity who is not in Australian at the time of the supply is made, making it GST-free under paragraph (a) of table item 2 of subsection 38-190(1) of the GST Act.