THE Australian Taxation Office has issued a draft determination it hopes will clarify the requirements of public speakers with regard to the Goods and Services Tax.
THE Australian Taxation Office has issued a draft determination it hopes will clarify the requirements of public speakers with regard to the Goods and Services Tax.
From now on, speakers will need to ask conference organisers for receipts and the value of any gifts of appreciation received for their time in an effort to determine whether they will be subject to GST.
The draft determination aims to remove any uncertainty public speakers may have felt over their tax treatment since the introduction of the GST.
In a five-page document, the ATO outlines its complex view on whether a token of appreciation given to a speaker is consideration for the supply of the speaking service, and should therefore attract GST.
As part of the determination, the speaker must decide whether the token of appreciation is reasonable value or above normal consideration, and so should be treated as taxable supply.
A definition of ‘reasonable value’ is not spelled out in the draft determination, so it is left up to individual speaker’s judgement.
The Draft Goods and Services Tax determination hopes to put speakers’ concerns at rest.
“Where a speaker supplies speaking services for no consideration at a conference or similar event, and the conference organiser subsequently presents the speaker with a token of appreciation, the token of appreciation will not be consideration for the supply of the speaker’s services for the purposes of the new tax system,” the Determination says.
If the speaker is being paid for speaking, but also receives a token of appreciation, the speaker will need to get receipts from organisers as the token will be subject to GST regard-less of the value of the item.
A token of appreciation typically takes the form of a book, a bottle of wine, a bunch of flowers or some other small non-monetary item.
“If the thing is a mere gesture of thanks, there is not sufficient nexus with the supply of services for it to be consideration for that supply,” the draft says.
“However, if a speaker is entitled under an agreement to receive any-thing in connection with, in response to, or for the inducement of the speaking services, then the thing will be consideration with the supply of speaking services.”– And so will be subject to GST.
To further clarify the matter, the draft uses an example of two speakers who are invited to address a conference. One speaker agrees to do so in return for $2,000 for his services, which is classified as taxable supply by the ATO. The other speaker agrees to supply her services for no consideration.
At the conference both speakers are presented a $110 bottle of wine. For the person who was not being paid to speak the bottle is viewed as a token of appreciation as “in the circumstances the value of the bottle of wine is reasonable for a mere gesture of thanks”, the determination says.
According to the ATO, what is reasonable depends on the circumstances and is up to the discretion of the speaker to determine.
However, for the speaker who was being paid to speak: “The bottle of wine has the same character as the fees paid. The wine is provided in connection with and in response to the supply of speaking services,” the ATO says.
“It is not a token of appreciation for the purposes of this determination.
“The speaker has made a total taxable supply of $2,110 including the value of the wine.”
In relation to speakers being provided with accommodation, trans-port and meals the ATO is equally clear.
“Where things such as accommodation, transport and meals are merely provided to enable a speaker to make a supply of speaking services, the things will not be consideration for the supply by the speaker,” the ATO says.
However, the ATO will generally view accommodation or meals provided outside the period of the conference as taxable supply and subject to the GST.
From now on, speakers will need to ask conference organisers for receipts and the value of any gifts of appreciation received for their time in an effort to determine whether they will be subject to GST.
The draft determination aims to remove any uncertainty public speakers may have felt over their tax treatment since the introduction of the GST.
In a five-page document, the ATO outlines its complex view on whether a token of appreciation given to a speaker is consideration for the supply of the speaking service, and should therefore attract GST.
As part of the determination, the speaker must decide whether the token of appreciation is reasonable value or above normal consideration, and so should be treated as taxable supply.
A definition of ‘reasonable value’ is not spelled out in the draft determination, so it is left up to individual speaker’s judgement.
The Draft Goods and Services Tax determination hopes to put speakers’ concerns at rest.
“Where a speaker supplies speaking services for no consideration at a conference or similar event, and the conference organiser subsequently presents the speaker with a token of appreciation, the token of appreciation will not be consideration for the supply of the speaker’s services for the purposes of the new tax system,” the Determination says.
If the speaker is being paid for speaking, but also receives a token of appreciation, the speaker will need to get receipts from organisers as the token will be subject to GST regard-less of the value of the item.
A token of appreciation typically takes the form of a book, a bottle of wine, a bunch of flowers or some other small non-monetary item.
“If the thing is a mere gesture of thanks, there is not sufficient nexus with the supply of services for it to be consideration for that supply,” the draft says.
“However, if a speaker is entitled under an agreement to receive any-thing in connection with, in response to, or for the inducement of the speaking services, then the thing will be consideration with the supply of speaking services.”– And so will be subject to GST.
To further clarify the matter, the draft uses an example of two speakers who are invited to address a conference. One speaker agrees to do so in return for $2,000 for his services, which is classified as taxable supply by the ATO. The other speaker agrees to supply her services for no consideration.
At the conference both speakers are presented a $110 bottle of wine. For the person who was not being paid to speak the bottle is viewed as a token of appreciation as “in the circumstances the value of the bottle of wine is reasonable for a mere gesture of thanks”, the determination says.
According to the ATO, what is reasonable depends on the circumstances and is up to the discretion of the speaker to determine.
However, for the speaker who was being paid to speak: “The bottle of wine has the same character as the fees paid. The wine is provided in connection with and in response to the supply of speaking services,” the ATO says.
“It is not a token of appreciation for the purposes of this determination.
“The speaker has made a total taxable supply of $2,110 including the value of the wine.”
In relation to speakers being provided with accommodation, trans-port and meals the ATO is equally clear.
“Where things such as accommodation, transport and meals are merely provided to enable a speaker to make a supply of speaking services, the things will not be consideration for the supply by the speaker,” the ATO says.
However, the ATO will generally view accommodation or meals provided outside the period of the conference as taxable supply and subject to the GST.
