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Re: Jobkeeper Decline in Turnover for Non GST registered Entity

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Newbie

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I have a client - an Australian resident business (trust) that provides services  to an overseas client and this is their only source of income for the business. Although all the business income is reportable and taxable here in Australia by the business  , the business hasn’t registered for GST in the past as there has been no requirement to given that all the supplies fall outside the scope of GST as the supply of it service to its overseas client  are not in connection with Australia. Does this mean that the client/ trust  can’t qualify for job keeper for the business participant if the only business income it receives is income from an overseas client it supplies services for given that the definition of GST turnover excludes income for supplies not in connection with Australia ? Or will there be an alternative test or adjustment  to definition of decline in “turnover” for businesses like this that have supplies that are excluded from calculation of GST turnover to calculate and assess what income they can assess and include in the calculation of decline in turnover for jobkeeper assessment as the client has suffered severely from this pandemic and their business income has ceased temporarily  completely since Mid March due to COVID-19 . Can someone please advise. The Trusts Business Turnover has completely ceased.

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Devotee

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They may still be eligible as the supplies are conencted with Australia if they are conducting their business from Australia and providing services overseas. Although there clients are overseas the income is still being paid to the Australian company so the sales are connected with Australia. They dont need to be registered for GST to calculate their GST turnover using the basic test

 

https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/Applying-the-turnover-test/?page=2#Step3w...

 

sales not connected with Australia, for example   

  • sales of services made through a business you carry on outside Australia
  • sales of goods purchased and sold from a place outside Australia
  • sale of real property situated outside Australia.
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Best answer

Devotee

Replies 2

They may still be eligible as the supplies are conencted with Australia if they are conducting their business from Australia and providing services overseas. Although there clients are overseas the income is still being paid to the Australian company so the sales are connected with Australia. They dont need to be registered for GST to calculate their GST turnover using the basic test

 

https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/Applying-the-turnover-test/?page=2#Step3w...

 

sales not connected with Australia, for example   

  • sales of services made through a business you carry on outside Australia
  • sales of goods purchased and sold from a place outside Australia
  • sale of real property situated outside Australia.
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Newbie

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Supplies of goods from Australia

22. A supply of goods is connected with Australia, if the supply involves those goods being removed from Australia.

23. 'Removed' in subsection 9-25(2) has its ordinary meaning. 'Remove' means to move from a place, to move or shift to another place, or to displace from a position.

https://www.ato.gov.au/law/view/document?docid=%22GST%2FGSTR20182%2FNAT%2FATO%2F00001%22

 

I dont know the above rule can be also applied to services?

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Hi @Sina,

 

Sorry for the delay in responding.

 

Please see work out the relevant GST turnover

 

In the turnover tests when we use the term sales we mean the GST term Sales (supplies)

 

Please refer to GSTR 2019/1

See Supplies connected under paragraph 9-25(5)(a) - when a 'thing is done' in Australia

 

The 'thing' being supplied

32. 'Thing' is defined to mean anything that can be supplied or imported. 'Thing' includes but is not limited to a service, advice, information, a right or a digital product. It does not matter if the supply is provided electronically.

 

Supply of a service

37. If the 'thing' being supplied is a service, the service is typically done where it is performed. If the service is performed in Australia, the service is done in Australia and the supply of that service satisfies paragraph 9-25(5)(a) even if the recipient of the supply is outside Australia.

 

Thanks for posting and I hope this information helps,

JasonT