ATO Interpretative Decision
ATO ID 2002/868 (Withdrawn)
Goods and Services Tax
GST and membership subscriptions to non-residents
FOI status: may be released
Status of this decision: Decision Withdrawn 13 June 2008
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the entity, an Australian organisation, making a GST-free supply under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a professional membership subscription to a non-resident subscriber who is not in Australia?
Yes, the entity is making a GST-free supply under item 2 in the table in subsection 38-190 of the GST Act, when it supplies a professional membership subscription to a non-resident subscriber who is not in Australia.
The entity is an Australian organisation. It supplies a professional membership subscription to a non-resident subscriber who is not in Australia.
The entity provides its members with the following:
- promoting the interests of the profession of its members to the general public;
- representing the interests of the profession in public forums;
- maintaining professional standards;
- advancing the knowledge of its members by sponsoring seminars or conferences;
- access to members-only information;
- library service including technical references or information;
- professional networking opportunities;
- periodic journals or magazines and
- discounts on registration fees for conferences or seminars in Australia;
- the right to use post-nominals demonstrating membership of the entity.
The entity is not a licensing body for the profession.
The non-resident subscriber overseas is neither registered nor required to be registered for goods and services tax (GST).
The entity is registered for GST.
Reasons for Decision
Professional membership subscriptions are treated as supplies of services. Although there may be other incidental components such as periodic journals or magazines or discounts on registration fees for seminars, the dominant part of the supply of professional membership is a supply of services.
Goods and Services Tax Ruling GSTR 2001/8 'Apportioning the consideration for a supply that includes taxable and non-taxable parts' outlines the characteristics of supplies that appear to have more than one part but are essentially supplies of one thing. These supplies are referred to as composite supplies. In particular, paragraph 17 of GSTR 2001/8 states:
'If you make a supply that contains a dominant part and the supply includes something that is integral, ancillary or incidental to that part, then the supply is composite. You treat a composite supply as a supply of a single thing.'
In regard to this professional membership subscription, the dominant part is the provision of services. The periodic journals or magazines and discounts on registration fees for seminars are merely integral, ancillary or incidental to those services. The supply is a composite supply and therefore is treated as a supply of one thing being a supply of a service.
Subsection 38-190(1) of the GST Act specifies the circumstances where the supply of things other than goods or real property, for consumption outside Australia is GST-free. Accordingly, the supply of the professional membership subscription is appropriately considered under subsection 38-190(1) of the GST Act.
Item 2 in the table in subsection 38-190(1) of the GST Act (Item 2) provides that a supply that is made to a non-resident who is not in Australia when the thing supplied is done, is GST-free where:
- 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
- the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered or required to be registered.
The entity supplies a professional membership subscription to a non-resident subscriber who is not in Australia. The supply is not a supply of work physically performed on goods in Australia or a supply directly connected with real property situated in Australia. As such, the supply satisfies the requirements of Item 2.
Therefore, the entity is making a GST-free supply under Item 2 in the table in subsection 38-190(1) of the GST Act when it supplies a professional membership subscription to a non-resident subscriber who is not in Australia.
Date of decision: 29 November 2000
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-190(1) table item 2
Related Public Rulings (including Determinations)
Goods and services tax
GST international services
Consumption outside Australia
Date of publication: 27 August 2002
|ATO ID 2002/868 (Withdrawn) history