ATO Interpretative Decision
ATO ID 2004/484 (Withdrawn)
Goods and Services Tax
GST and services provided by Australian branch to non-resident company
FOI status: may be released
||This ATO ID is withdrawn as it is superseded by GSTR 2006/9.
||This document has changed over time. View its history.
Status of this decision: Decision Withdrawn 29 June 2007
|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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 Australian branch of a non-resident company making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to the non-resident company, when:
- it carries out marketing services to the non-resident company, and
- the Australian branch is not a separate legal entity or a GST branch?
No, the Australian branch is not making a taxable supply under section 9-5 of the GST Act to the non-resident company. The Australian branch is not making a supply to the non-resident company as both are the same legal entity.
The Australian branch of a non-resident company was established to carry out marketing services for the non-resident company. The Australian branch is neither a separate legal entity to the non-resident company nor a GST branch of the non-resident company.
The non-resident company is registered for goods and services tax (GST) and operates in a number of countries throughout the world.
Reasons for Decision
Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply.
The term 'supply' is a broad concept for GST purposes and is defined in subsection 9-10(1) of the GST Act as 'any form of supply whatsoever'. The meaning of the term 'supply' is discussed in Goods and Services Tax Ruling GSTR 2001/4 and paragraph 22 provides that a supply is essentially 'something which passes from one entity to another'.
The Australian branch of a non-resident company carries out marketing services for and to the non-resident company. Therefore, it needs to be determined whether 'something passes from one entity to another' for the purposes of the GST Act, when these marketing services are carried out.
An entity may conduct more than one distinct activity or operate in a number of different locations. Such an entity may be managed on a branch or divisional basis with each branch accounting separately. Provided that they are part of the same legal entity, transactions between the branches or between the branch and parent, are not supplies for GST purposes. The recipient and the supplier would be the same entity, and a supply cannot be made to oneself.
The Australian branch is not a separate legal entity to the non-resident company. In addition, the Australian branch is not a GST branch of the non-resident company. As such, the Australian branch and the non-resident company are the same legal entity and something does not pass from one entity to another when the marketing services are carried out and no supply is made.
Therefore, the Australian branch is not making a taxable supply under section 9-5 of the GST Act when it carries out marketing services to the non-resident company.
Note. An entity that is registered for GST can separately register a branch for GST purposes where the provisions of section 54-5 of the GST Act are met. The effect of registering a GST branch is that the branch will act as if it is a separate entity. Therefore, transactions that occur between a separately registered branch and the parent or other branches of the parent, will be supplies for GST purposes.
Date of decision: 6 April 2004
A New Tax System (Goods and Services Tax) Act 1999
Related Public Rulings (including Determinations)
Goods and Services Tax Ruling GSTR 2001/4
Goods and services tax
GST special rules
Date of publication: 11 June 2004
|ATO ID 2004/484 (Withdrawn) history