GST Ruling GSTR 2018/1, issued on 22 August 2018, sets out the ATO's view on when supplies of real property are connected with the indirect tax zone (ie Australia) under s 9-25(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
GSTR 2018/1 states that a supply of real property is connected with Australia if the real property, or the land to which the real property relates, is in Australia. The ATO stresses that the test is the location of the physical land and not the location of the interest or right over the land.
The ruling also states that the supply of a right to accommodation in Australia constitutes the supply of real property connected with Australia. It is irrelevant whether the supplier (eg a tour operator) provides any actual accommodation to the recipient, the ATO says.
The ruling includes the following examples of supplies of real property that are connected with Australia:
- selling land situated in Australia;
- granting, assigning or surrendering a lease or licence of land situated in Australia;
- a personal right to call for or be granted any interest or right over land in Australia;
- granting a put or call option over land situated in Australia;
- a licence to occupy land in Australia; and
- granting contractual rights to occupy or stay at accommodation in Australia (including a stay at a hotel or motel on presentation of a voucher or travel document) – for example, a tour operator (whether a resident or non-resident) who grants a traveller the right to stay at a Perth hotel, where the hotel is operated by a different entity, makes a supply of real property connected with Australia (see Examples 1 and 2 of GSTR 2018/1).
GSTR 2018/1 applies from its date of issue, 22 August 2018. It finalises draft GSTR 2017/D2 and contains the same views as the draft. The ruling replaces GSTD 2004/3 GST: is a supply of rights to accommodation a supply of real property for the purposes of the GST Act?, which was withdrawn on and with effect from 22 August 2018.
GSTR 2018/1 also updates the ATO's views in GST Ruling GSTR 2000/31 GST: supplies connected with Australia in relation to supplies of real property. The ATO proposes to withdraw GSTR 2000/31 when final rulings are issued with respect to the other connection rules in GSTR 2000/31. (Draft GSTR 2017/D1 considers the supply of goods.) In the meantime, taxpayers can continue to rely on GSTR 2000/31 in relation to those other connection rules.