We are a company that take groups overseas to participate in sports tournaments. Some clients source their own sponsors, direct them to us, we invoice them and reduce the client invoice total with the amount sponsored, in return we print the sponsor logos on the clothing. As the event is overseas and the event invoice doesn't have GST applied to it, do I apply GST to the client invoice and these sponsorships?
Hey @MEngel,
Hmm, there's a few different things going on here.
The client invoices you for overseas events
If your company runs an event overseas and the services you give are used outside Australia, you might not need to charge GST.
GST-free export means:
Sponsorship Payments
If a sponsor gives your business money and you give something back, like putting their logo on team clothing that would be a taxable supply.
Even if the sports event is overseas, your business is still providing the advertising benefit in Australia, so GST must be charged on the sponsorship amount.
Things to consider
Because your business gives a benefit in return, you have to charge GST. This is true even if you subtract the sponsorship from the client’s bill.
As sponsorships aren’t gifts but considered business deals, GST would be required.
You may be able to lower the client’s invoice by the amount sponsored, but you'd have to show which parts have GST added and which don't.
It might be worth seeing a registered tax agent, of you're unsure how to report it.
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