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1 Is the supply of digital content by you as an Australian content creator to the recipients (subscribers and fans) through *platform A* (a non-resident platform operator), GST-free under subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

1 No, only the supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to the subscribers and fans in Australia will be taxable and subject to GST as the supply will satisfy all of the requirements of a taxable supply under section 9-5 of the GST Act. Question 2 Is the supply of digital content by you as an Australian content creator to the recipients (subscribers/fans) through *platform B* (a non-resident platform operator) GST-free under subsection 38-190(1) of the GST Act? Answer 2 No, only the supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to the subscribers and fans in Australia will be taxable and subject to GST as the supply will satisfy all of the requirements of a taxable supply under section 9-5 of the GST Act. However, *platform B* will be responsible for GST on all sales to subscribers/fans in Australia as the requirements of section 84-60 of the GST Act are satisfied. Question 3

Is the supply of digital content by you as an Australian content creator to the recipients (subscribers/fans) through *platform C* (a non-resident platform operator) GST-free under subsection 38-190(1) of the GST Act? Answer 3 No, only the supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to the subscribers and fans in Australia will be taxable and subject to GST as the supply will satisfy all of the requirements of a taxable supply under section 9-5 of the GST Act. However, *platform C* will be responsible for GST on all sales to subscribers/fans in Australia as the requirements of section 84-60 of the GST Act are satisfied. This ruling applies for the following period: *date* The scheme commences on: *date* to *date*

You are an Australian resident carrying on an enterprise of creating and providing digital content to subscribers/fans. You are registered for GST. All content is created in Australia and supplied through three non-resident platform operators, *platform A*, *platform B* and *platform C* (together, the platforms). The platforms make content available to subscribers/fans through a website. You interact with the platform directly to sell your content and subscribers/ fans from all over the world including Australia purchase your content via the platform. The subscribers/fans pay the platforms for their purchase of your content and the platform collects the payments on behalf of the content creators. Under the terms and conditions of the platforms, you retain ownership of the content and grant the platforms a license to amongst other things use and publish your digital content. The platforms transfer the payments collected, to the content creators after deducting their fees of XX% for the use of their platform by the content creators. *Platform A*

The platform does not collect the GST on behalf of the Australian content creators, and they do not charge GST on the fees charged by them to the content creators. The platform does collect the details of the subscribers/fans based on their geolocation. The platform provided information in relation to your earnings, tips received, and the fees charged by them on a monthly basis. *Platform B* and *Platform C* The platform collects the GST on behalf of the Australian content creators on all sales of digital content made to subscribers/fans in Australia. The platform does not provide details of the subscribers/fans based on their geolocation. *Platform C* also provides a subscription service where the subscriber/fan can pay monthly to access content until that subscription is cancelled.

A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 subsection 9-25(5) A New Tax System (Goods and Services Tax) Act 1999 section 11-5 A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(1) & (3) A New Tax System (Goods and Services Tax) Act 1999 section 84-60 A New Tax System (Goods and Services Tax) Act 1999 section 84-70

Question 1 Is the supply of digital content by you as an Australian content creator to the recipients (subscribers and fans) through *platform A* (a non-resident platform operator), GST-free under subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? Summary The supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to subscribers/fans in Australia will be taxable and subject to GST as the supply will satisfy all the requirements of a taxable supply under section 9-5 of the GST Act. Detailed reasoning Goods and Services Tax (GST) is payable on a taxable supply as per section 7-1 of the GST Act. Section 9-5 of the GST Act provides that you make a taxable supply if: (a) you make a taxable supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with the indirect tax zone; and (d) you are *registered or *required to be registered However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.

(*denotes a term defined in section 195-1 of the GST Act). You are carrying on an enterprise of supplying digital content to subscribers/fans through an online platform. You receive consideration for your supply from the subscribers/fans through the platform and you are registered for GST. One of the requirements of a taxable supply is that the supply should be connected with the indirect tax zone (Australia). Subsection 9-25(5) of the GST Act provides that a supply of anything other than goods or real property is connected with Australia if: (a) the thing is done in Australia; or (b) the supplier makes the supply though an enterprise that the supplier carries on in Australia; or (c) all of the following apply: (i) neither paragraph (a) nor (b) applies in respect of the thing; (ii) the thing is a right or option to acquire another thing; (iii) the supply of the other thing would be connected with Australia; or (d) the recipient of the supply is an Australian consumer.

To satisfy whether your supply of content will be connected with Australia, you need to meet one of the listed elements in subsection 9-25(5) of the GST Act. Since you make the supply through your enterprise carried on in Australia, your supply will satisfy paragraph 9-25(5) of the GST Act. Supply of content to subscribers/fans and not to *platform A* You supply content to subscribers/fans based both in Australia and outside Australia. According to the terms of use, every transaction you enter into with subscribers/fans is a contract between you and the subscriber/fan. You do not enter into a contract with *platform A*. *Platform A* facilitates the transaction between you and the subscribers/fans through the use of its platform. The contract that you enter into with subscribers/fans does not form part of your agreement with *platform A* but governs and sets out the terms applicable to each transaction with subscribers/fans you enter into through the platform.

The content you supply is not confidential, and you authorise your subscribers/fans to access and view your content on the platform for their own lawful and personal use in accordance with any licenses you grant to your subscribers/fans. You either own your content (and all intellectual property rights in it) or have a valid license to offer and supply the content to subscribers/fans. Based on the terms of use, it is our view that you do not supply content to *platform A*, rather you make the supply directly to your subscribers/fans using the platform on the terms of the contract as explained above. The supplies made to subscribers/fans in Australia will satisfy all the requirements of section 9-5 of the GST Act as the supplies are connected with Australia and will therefore be subject to GST. However, your supplies of content made to subscribers/fans outside Australia may be GST-free. GST-free supply of content Subsection 38-190(1) of the GST Act provides that supplies of things other than goods or real property for consumption outside Australia will be GST-free.

Table item 2 of subsection 38-190(1) of the GST Act (item 2) provides that a supply made to a non-resident who is not in Australia when the thing supplied is done is GST-free where: (a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia; or (b) the non-resident acquires the thing in carrying on the non-resident's enterprise but is not registered or required to be registered. (b) the non-resident acquires the thing in carrying on the non-resident's enterprise but is not registered or required to be registered. Your supply of content to non-resident subscribers/fans is neither a supply of work physically performed on goods located in Australia nor a supply connected with real property situated in Australia. Hence, your supply of content will satisfy the requirements of paragraph (a) of item 2. GST and your total earnings

You have been provided details of your total earnings based on geolocation of the subscribers/fans. They have also provided you with a breakdown of earnings received from Australian subscribers/fans. Your total earnings comprise of income from chat messages, subscriptions and tips. The taxable supplies you make to subscribers/fans in Australia include the amount deducted by *platform A* for their fees. As part of the service provided to you, *platform A* is collecting the consideration from your subscribers/fans in Australia and crediting the amount to your nominated account after deducting their fees. Regardless of the deduction of their fees, you are liable to report GST on the total earnings from Australia subscribers/fans and not the net earnings credited to your account. You are required to work out your total earnings from Australian subscribers/fans for your supply of content from the date you are registered or required to be registered for GST. GST and tips earned Tips received by you in relation to your supply of content are treated as consideration for a supply for GST purposes. It does not matter whether the tips are paid voluntarily.

Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) provides, amongst other things, the definition of consideration. Paragraph 107 of GSTR 2006/9 states: 107. The definition of consideration in section 195-1 states: consideration, for a supply or acquisition, means any consideration within the meaning given by 9-15 and 9-17, in connection with the supply or acquisition. Hence, consideration for a supply is defined as being any consideration in connection with a supply. Consideration in section 9-15 relevantly means: (1) Consideration includes: (a) any payment, or any act or forbearance, in connection with a supply of anything, and (b) any payment, or any act of forbearance, in response to or for the inducement of a supply of anything. (2) It does not matter whether the payment, act or forbearance was voluntary...

The Commissioner takes the view that the words 'in connection with the supply' in section 195-1, and the phrases 'in connection with a supply of anything' and 'it does not matter whether the payment, act or forbearance was voluntary' in section 9-15 to mean that there does not have to be an enforceable relationship for there to be a sufficient nexus between the supply and a payment. Nor does consideration have to be agreed to in advance. Example 2 (paragraphs 109 to 111) of GSTR 2006/9 provides further explanation about tips paid by recipients of the supply voluntarily. It states: 109. A restaurant run by a sole trader accepts tips from its customer, including tips on bills paid by credit card. These tips are unsolicited and are in addition to the price stipulated by the restaurant in the bills presented to the customers. The sole trader does not pass these tips on to the restaurant's employees.

110. These tips are voluntary payments made in connection with the restaurant supplies made by the sole trader to its customers. Although there is no obligation on the customer to make these payments, the tips form part of the consideration for the restaurant supplies by the sole trader to its customers. 111. On the other hand, if the sole trader passes the tips on to the restaurant's employees, the payments are not for the restaurants supplies by the sole trader. The tips constitute income of the restaurant employees and such payments are not subject to GST as the employees are not carrying on an enterprise for GST purposes. If the bill is paid by credit card and the amount of tip is marked on the payment slip the restauranteur would need to demonstrate that the tip is passed on to the employee. In this case, you are carrying on an enterprise (registered for GST) and the tips you receive from subscribers/fans via the *platform A* will form part of the consideration for your supply of content. Therefore, you are liable to pay GST on the tips received from your subscribers/fans via *platform A*. GST and fees You are entitled to claim GST credits on creditable acquisitions.

Section 11-5 of the GST Act states: You make a creditable acquisition if: (a) you acquire anything solely or partly for a creditable purpose; and (b) the supply of the thing to you is a taxable supply; and (c) you provide, or are liable to provide, consideration for the supply; and (d) you are registered, or required to be registered. The fees charged by *platform A* for using their platform will be a separate transaction between you and *platform A*. *Platform A* has confirmed that fees charged by them do not include GST. This means that the supply of services provided by *platform A* to you is not a taxable supply. Therefore, you are not entitled to claim GST credits on fees paid to *platform A*. Conclusion 1)            You are required to report GST on the total earnings (from Australian subscribers/fans) and not the net earnings credited to your nominated account. 2)            Your total earnings would include tips received by your Australian subscribers/fans through *platform A*. 3)            You are not entitled to claim GST credits on the fees charged by *platform A*. Question 2

Is the supply of digital content by you as an Australian content creator to the recipients (subscribers/fans) through *platform B* (a non-resident platform operator) GST-free under subsection 38-190(1) of the GST Act? Summary The supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to subscribers/fans in Australia will be taxable and subject to GST as the supply will satisfy all the requirements of a taxable supply under section 9-5 of the GST Act. However, *platform B* is responsible for GST on all supplies of digital content made by you to subscribers/fans located in Australia as the requirements of section 84-60 of the GST Act is satisfied. Detailed reasoning For the same reasons as outlined in Question 1, the supply of digital content to subscribers/fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to subscribers/fans in Australia will be taxable and subject to GST as the supply will satisfy all the requirements of a taxable supply under section 9-5 of the GST Act.

Paragraphs 60 to 68 of LCR 2018/2 provides more information on digital supplies that are subject to the Electronic Distribution Platform (EDP) rules if there is an agreement. An inbound intangible consumer supply is defined as a supply of anything other than goods or real property and the recipient is an Australian consumer, unless: • the thing is wholly done in Australia, or • the supply is made wholly through an enterprise the merchant carries on in Australia. As you are making supplies of digital content through an enterprise you carry on in Australia, the supplies of content are not inbound intangible supplies and you will be responsible for GST. However, section 84-60 of the GST Act provides the option for an EDP operator to treat all products and digital services in the same way, regardless of whether the thing supplied is an inbound intangible consumer supply. Section 84-60 of the GST Act states: (1) Section 84-55 applies to a supply that is to be made by means of *electronic communication as if it were an *inbound intangible consumer supply if: (a) the supply is made through an *electronic distribution platform; and

(b) the supply is covered by a written agreement entered into between the supplier and the operator of the platform before the supply is made; and (c) the operator is *registered; and (d) under the agreement, the supply is to be treated as if it were an inbound intangible consumer supply made through the platform. (2) However, subsection (1) does not apply to the supply if: (a) the supply is GST-free or input taxed; or (b) the operator would not be treated under section 84-55 as being the supplier of, and making, the supply if it were an *inbound intangible consumer supply. (3) If subsection (1) applies to the supply, the supply is treated as having been made in the course or furtherance of the carrying on of the *enterprise through which the operator operates the platform. The consequence of an agreement being made under section 84-60 of the GST Act is that even If the EDP operator's enterprise is carried on outside Australia, the EDP operator will still be responsible for GST on all supplies made to Australian consumers. A service will be an EDP under section 84-70 of the GST Act where it satisfies all of the following:

a) the service allows entities to make supplies available to end-users; and b) the service is delivered by means of electronic communication. *Platform B* satisfies the requirements of section 84-70 of the GST Act as it allows content creators to supply digital content to subscribers/fans. Further, *platform B* delivers the service through its website, which is by means of electronic communication (as per paragraph 34 of LCR 2018/2). You and *platform B* have specifically agreed under the standard agreement that *platform B* act as payment agent and collect, retain, and process fan payments and any applicable GST, deduct and pay the commission fee, and amounts due to creators and (if applicable) users on supplies of digital content to subscribers/fans through the platform.

As such, even though *platform B* carries on its enterprise outside Australia, it will be responsible for GST on all supplies of digital content that you make to subscribers/fans located in Australia under section 84-60 of the GST Act. This provision does not apply in respect to your GST-free supplies of content to subscribers/fans outside Australia. Further, paragraph 84-60(2)(b) of the GST Act is not applicable. Question 3 Is the supply of digital content by you as an Australian content creator to the recipients (subscribers/fans) through *platform C* (a non-resident platform operator) GST-free under subsection 38-190(1) of the GST Act? Summary The supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to subscribers/fans in Australia will be taxable and subject to GST as the supply will satisfy all the requirements of a taxable supply under section 9-5 of the GST Act. However, *platform C* is responsible for GST on all supplies of digital content made by you to subscribers/fans located in Australia as the requirements of section 84-60 of the GST Act is satisfied.

Detailed reasoning For the same reasons as outlined in Question 1, the supply of digital content to subscribers and fans outside Australia will be GST-free under subsection 38-190(1) of the GST Act. The supply of digital content to subscribers and fans in Australia will be taxable and subject to GST as the supply will satisfy all the requirements of a taxable supply under section 9-5 of the GST Act. As outlined in Question 2, section 84-60 of the GST Act provides the option for an Electronic Distribution Platform (EDP) operator to treat all products and digital services in the same way, regardless of whether the thing supplied is an inbound intangible consumer supply. *Platform C* satisfies the requirements of section 84-70 of the GST Act as it allows content creators to supply content to subscribers/fans by means of electronic communication.

You and *platform C* have specifically agreed under the terms of use that *platform C* will be responsible for the collection, reporting, and remittance of the GST for all sales creators make through the platform to Australian consumers. This satisfies the requirement of paragraph 84-60(1)(b) of the GST Act. Additionally, *platform C* is registered for GST and therefore under this agreement have agreed for the supply to be treated as if it were an inbound intangible consumer supply made through its platform. Therefore, even though *platform C* carries on its enterprise outside Australia, it will be responsible for GST on all supplies of digital content you make to Australian subscribers/fans under section 84-60 of the GST Act. This provision does not apply in respect to your GST-free supplies of content to subscribers/fans outside Australia. Further, paragraph 84-60(2)(b) of the GST Act is not applicable.