GST Treatment For Business Of Organising Overseas Conferences

Q&A Tax

Question :

Ms Chan is in a business of running overseas conferences and registered for GST. She charges her
clients a fee and organises the conference overseas with her two employees. When staying overseas,
She and her staff incur some international flight fares and accommodation fees paid to an overseas
supplier.

When charging the client, is she required to charge GST on the entire amount?

Can she claim GST Credit on expenses relating the international flights and overseas accommodation?

 

Answer :

If you are registered for GST – or required to be – the goods and services you sell in Australia are
generally taxable unless they are GST-free or input-taxed.

To be a taxable sale (that is, a sale that has GST in the price), a sale must be:
• for payment of some kind
• made in the course of operating your business
• connected with Australia.

A sale of services is connected with Australia if any of the following applies:
• the thing is done in Australia
• the seller makes the sale through a business they carry on in Australia
• the sale is of a right or option to purchase something that would be connected with Australia.
• the purchaser of the sale is an Australian consumer.

Under these rules, Ms Chan is generally subject to GST as the supply of conference is provided by a
GST-registered entity in the course of running an enterprise.

However, the supply may not be subject to GST given any of the items listed in section 38-190 GST Act
is satisfied. Item 3 states that a supply is GST-Free if:
(a) that is made to a * recipient who is not in the indirect tax zone when the thing supplied is done; and
(b) the effective use or enjoyment of which takes place outside the indirect tax zone;
other than a supply of work physically performed on goods situated in the indirect tax zone when the
thing supplied is done, or a supply directly connected with * real property situated in the indirect tax
zone.

If the conference is held overseas then the amount charged to the customers to attend the
conference should be GST-free, regardless of whether the recipients are residents or non-residents.
Accordingly, the international flight fare and overseas accommodation are not connected with Australia
and therefore, do not have GST Credit on them.

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