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QUERIES123(Enthusiast)Registered Tax Professional
25 Aug 2023

An Australian musician creates a recording in Australia and distributes it digitally through an overseas distributor, who sells music all over the world. The musician receives a statement once a quarter from the overseas distributor and is automatically paid a share of the income from the sale of the music, which is considered gst free income from an overseas source.

It is likely that some of the music sold was sold to Australians.

Is any of this income considered connected to Australia for the purposes of calculation gst turnover? And should the fact that some of the sales originated in Australia be something to consider for gst purposes?

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2,143 views
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Most helpful reply

JacobATO(Community Support)Community Support
29 Aug 2023

Hi @QUERIES123


Bit of a noodle scratcher there.


The main point to be aware of his that the payment of the royalties would be due to the sale of a right being provided to the overseas company. Where a right is for use both in and outside of Australia then an apportionment would need to be made, of how much of the supplied right was used in Australia. This portion of the income would then be used for determining the client’s GST turnover, and if they are registered then this portion would need to have GST included.


GSTR 2003/8 is the ruling that covers the supply of rights for use outside Australia.

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Most helpful reply

JacobATO(Community Support)Community Support
29 Aug 2023

Hi @QUERIES123


Bit of a noodle scratcher there.


The main point to be aware of his that the payment of the royalties would be due to the sale of a right being provided to the overseas company. Where a right is for use both in and outside of Australia then an apportionment would need to be made, of how much of the supplied right was used in Australia. This portion of the income would then be used for determining the client’s GST turnover, and if they are registered then this portion would need to have GST included.


GSTR 2003/8 is the ruling that covers the supply of rights for use outside Australia.

QUERIES123(Enthusiast)Registered Tax Professional
3 Sept 2023

It's really a fee for service, as it's a distribution deal and not a licensing deal. They sell the music and take a commission on each album sold and we receive the balance. It's not considered a royalty in this case as we have not signed over the rights to the IP, nor do they have the exclusive right to distribute music either.

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