ATO Clarifies GST Exemption for Supplies to Nonresidents
The Australian Taxation Office (ATO) has clarified the Goods and Services Tax (GST) exemption for supplies made to nonresident entities. On July 23, 2025, the ATO released GST Ruling No. GSTR 2025/1, providing much-needed guidance on the matter.
The ruling specifies that supplies other than goods or real property are GST-exempt if made under an agreement directly or indirectly with a nonresident. However, this exemption does not apply if the supply involves options or acquisition rights for real property located in Australia, or if it involves input-taxed supplies within Australia.
For mixed supplies made to both a nonresident and a resident entity, only the portion supplied to the nonresident qualifies for the exemption. The ruling applies to supplies made both before and after the issue date, provided that relevant conditions are satisfied.
GST Ruling No. GSTR 2025/1, released by the ATO on July 23, 2025, has brought clarity to the GST exemption for supplies made to nonresident entities. Businesses can now better understand and comply with their GST obligations, particularly when dealing with nonresident entities.
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