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1 July 2021

Currently working on a big job for a Spanish client. I am overseeing a large budget where I am paying 10+ contractors to do freelance work on this campaign from the amount I have invoiced for. I have just been told by the overseas client that GST shouldnt be charged on my invoice as they are overseas. My questions are

  • How will this affect my tax return as its a large lump sum?
  • Some of my contractors are in Australia and will be charging me GST for their work- where does their GST amount come from if not from that 10%?
  • Most of my contractors are in New Zealand. Does this mean that when my contractors invoice me, they also shouldnt add NZ GST?

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1,095 views
1 replies

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Most helpful reply

RichATO(Community Support)Community Support
3 July 2021

Hi @manuelaleigh

Your Spanish client is correct. You shouldn't be charging them GST on your invoices for the services you are providing unless they will be using the service within Australia. A supply of a service is GST-free if the recipient of the service is outside Australia and the use of the service is outside Australia.

Onto your second question. You can still claim credits for the GST included in the price of purchases you use to make your exported goods and services. So the GST charged by your Aussie contractors can be claimed as GST credits when you lodge your BAS.

Finally, you will need to ask your NZ contractors to confirm with their advisors that they are able to supply their services to you GST-free.

Based on this information on the NZ Inland Revenue web page for Zero-rated supplies I would say they should be able to provide their services free of GST. Read the 'Certain exported services' section on the above page.

I hope that's helpful.

All replies

Most helpful reply

RichATO(Community Support)Community Support
3 July 2021

Hi @manuelaleigh

Your Spanish client is correct. You shouldn't be charging them GST on your invoices for the services you are providing unless they will be using the service within Australia. A supply of a service is GST-free if the recipient of the service is outside Australia and the use of the service is outside Australia.

Onto your second question. You can still claim credits for the GST included in the price of purchases you use to make your exported goods and services. So the GST charged by your Aussie contractors can be claimed as GST credits when you lodge your BAS.

Finally, you will need to ask your NZ contractors to confirm with their advisors that they are able to supply their services to you GST-free.

Based on this information on the NZ Inland Revenue web page for Zero-rated supplies I would say they should be able to provide their services free of GST. Read the 'Certain exported services' section on the above page.

I hope that's helpful.

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