The Australian Taxation Office (ATO) has issued a release providing guidance on GST changes for offshore suppliers of Australian accommodation.
GST changes for offshore suppliers of Australian accommodation
Offshore sellers of Australian commercial accommodation need to determine if they should register for GST from 1 July 2019.
Many of these sellers have historically been excluded from having to include GST in their prices, regardless of their turnover.
New legislation means that from 1 July 2019 these businesses receive the same tax treatment as domestic sellers.
If you have clients who are offshore businesses involved in selling Australian commercial accommodation, you need to determine if they:
- are selling direct to customers who use the accommodation (offshore seller)
- only facilitate sales of accommodation.
Selling directly to customers
Offshore sellers that sell hotel and other similar commercial Australian accommodation may:
- be required to apply for an ABN, register and account for GST from 1 July 2019 if they meet the registration turnover threshold of $75,000 over a 12-month period
- request concessional arrangements for the first 12 months for supplies made from 1 July 2019.
Acting as an agent
If your clients act as an agent to facilitate sales on behalf of Australian accommodation providers, they are not affected by this change, but may already have other GST obligations for their imported services.
If your clients are:
- Australian commercial accommodation providers selling accommodation to or via offshore businesses need to clarify if the offshore business is acting as an agent or a re-seller to determine the amount of GST payable on their supplies.
- GST-registered businesses purchasing Australian commercial accommodation can now request a tax invoice to support their claims for GST credits.