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Location, location, location – Where are rights for use?

Published on 01 Jun 14 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

A “supply in relation to rights for use outside Australia” is GST-free under item 4(a) of the table in s 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999. Since the High Court decision in Travelex Ltd in 2010, the issue of whether particular supplies of rights are for use outside Australia has become particularly important in the context of financial services, which often constitute the supply of rights, in the global economy. The Commissioner has recently issued a draft GST determination about the application of item 4(a) to the supply of a credit card.

This article explores the issue of when rights are for use outside Australia for the purposes of item 4(a). In particular, it analyses the approach adopted by the High Court to determine the location of use and queries whether the views expressed by the Commissioner in the draft determination are consistent with this approach.

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Matt Strauch

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