The GST
Anne Harvey – Group Tax Manager,
Corporate Finance
Objectives
• Provide an overview of GST and how it relates
to fundraising and sponsorships at UNSW
• Understanding when to apply GST
What is GST
Goods and services tax (GST) is a broad based tax of 10% on most
goods, services and other items sold or consumed in Australia.
GST is a tax on transactions.
Registration
 Annual turnover $75,000 or more
 Non Profit organisation - if annual turnover $150,000 or more
 Optional if below these thresholds
When does GST apply
When is it applicable
• Taxable sales




price includes GST
pay GST on sales
claim GST on purchases
1/11th of Total invoice/sale price
• Taxable supply
 for consideration
 in course of furtherance of
carrying on enterprise
 connected with Australia
 registered or required to be
registered
 not GST free or input taxed
When is it not applicable
• GST free sales
 Basic food - meat, milk, bread,
fruit and vegetables
 Most education, child care,
health
 Some exports
• Input Taxed sales
 Residential property
 Financial transactions
 Cannot claim GST credit
Registration
Registered
• www.abr.business
• Look up ABN on ABR regn
• Charity tax Concession
• Deductible Gift
Not
• Does not include GST in
of sales
• Must still pay GST
price if charged
• Meet threshold
• Charge GST on all
Sales
• Claim ITC for GST
purchases for business
• Completes an Activity
(BAS)
• Not able to claim GST
(Input Tax Credits)
charged for purchases
business
How Does GST work
Supplie
r
Raises
Tax
Invoice
Purchase
r
Receives
Tax
Invoice
Issue Tax
invoice
$1100
•Taxable
Sale $1000
•GST on
sale $100
Receives Tax
Invoice $1100
•Purchases
$1000
•GST
charged
$100
Total Sales
on BAS $1100
•Sales
$1000
• Remit GST
1/11th to
ATO $100
Total
Acquisitions
on BAS $1100
•Acquisitio
n $1000
•Claim ITC
for GST
$100
Cash Received
$1100
•Net
revenue
$1000
•GST paid
to ATO
$100
Cash Payment
$1100
•Net
Expense
$1000
•GST
claimed
from ATO
$100
UNSW
Sponso
Spons
or r
Taxable Supply and Consideration
Supply
•
•
•
•
•
•
•
•
•
Any form of supply
Supply of goods
Supply of services
Provision of advice or information
Grant, assignment or surrender of real
property
Creation, grant, transfer, assignment or
surrender of any right
Financial supply
Entry into or release from an obligation to do
anything, refrain from act, to tolerate act
Does not include supply of money unless
consideration
Consideration
•
•
•
•
•
•
Any payment or any act or forbearance, in
connection with a supply of anything
Any payment, or any act or forbearance, in
response to or for the inducement of a
supply of anything
Does not matter if voluntary, or by recipient
of supply
Does not matter if court order/ other body
Does not matter if relates to settlement
proceeding before court /other body
Gift to Non Profit body – not consideration
GST Concessions - NFP
Concession
1.
2.
3.
4.
5.
6.
Comment
Gift – No GST
Donated second hand goods– Sale GST
free
Fundraising event – can treat as Input Taxed
1.
2.
3.
Raffles and bingo tickets – GST free
Non commercial activities – payment less
than set amount – GST free
Reimburse Volunteer expenses – claim GST
credit
4.
5.
6.
Made voluntarily and no material benefit
No change in original character of goods
All sales associated with event as IT –
cannot claim GST credits for purchases, not
charge GST on sales. Keep record of choice
Not contravene state or territory law
< 50% GST inclusive Market value or
< 75% of amount paid to acquire goods
Exact reimbursement of expense. Obtain
Tax invoice for purchase
Gifts
What is a gift
 Made voluntarily - no obligation to pay, no contractual arrangement for NFP organisation to
use payment in a specific way
 Arises by way of benefaction – DGR is advantaged, without detriment to recipient
 No material benefit to payer – insubstantial value, cannot be put to a use, not marketable.
• Badge/ plaque - not material,
• Advertising banners , display of logo/ name - material
What is the impact to the organisation if we charged GST erroneously?
 Gift does not meet rules for Taxable Supply and consideration.
 If no Tax Invoice, may not be able to claim ITC for GST
 If not registered for GST, cannot claim ITC
 Additional cost to them
 If registered for GST, may be able to claim ITC if Tax Invoice provided
Risk to UNSW if GST Not charged
where Applicable
 If Taxable Supply UNSW still have to remit 1/11th of total amount to ATO
 Loss of revenue received by UNSW – only 10/11ths.
 Audit risk – inadequate processes and controls
 Penalties and Fines
Sponsorship
 Sponsorship support provided in form of money – consideration
 In return UNSW provide advertising, signage, naming right, or other
material benefit (something of value) – supply
 As UNSW registered for GST, it has to pay GST on sponsorship
received
 If sponsor registered for GST, claim Input Tax Credit for GST with
Tax Invoice
Sponsorships of DGRs by commercial entities – Advertising benefit - GST
Sponsorship
Example
GST Application/ Reasons
1.
1.
Sponsor representation on selection panel
Benefit to Sponsor ?


2.
Student Internship may be offered
2.
3.
4.
Student Internship is mandatory
Post Graduate Research student – research
of interest to Sponsor
Scholar selected as area of research of
interest to Sponsor
Capital Project - stipulate naming rights
Event - Public recognition / Commercial
Advertising
3.
4.
Chair/ Fellowship
Prize/ Award
8.
9.
5.
6.
7.
8.
9.
5.
6.
7.
Right in say of recipient – GST
Sponsor retains some control - GST
Privilege to Sponsor?
 Right to services – GST
Services of student , marketing – GST
Research interest and benefit – GST
Research interest and benefit - GST
 Use of results - GST
Marketing benefit / obligation – GST
Marketing benefit – GST
 Mere acknowledgement of generosity/
plaque – No GST
Marketing benefit , attend function – GST
Internships, attend function, membership - GST
Fundraising
Example
GST
1.
Ticket to fundraising dinner $1100
 $1100 price to attend dinner
1.
Ticket price includes GST of $100.
 Funds raised $1000
2.
Ticket price to dinner $110
 Additional donation of $200
2.
Ticket price includes GST of $10
 $200 is gift – No GST
3.
Auction
 Purchase item for $550, value $300
3.
Amount paid $550
 not voluntary, material benefit - not gift
 GST of $550/11 = $50
Questions
Contact: Anne Harvey - Ext 51635. Email: a.harvey@unsw.edu.au