GST issues registers
Motor vehicle industry partnershipIssue 10 - Sponsorship arrangements
10.a. What is the treatment and valuation for GST purposes of vehicles provided as part of sponsorship arrangements?
Non-interpretative - other references (see general principles in GSTR 2001/6 - Goods and services tax: non-monetary consideration).
Amounts paid as sponsorship fees are usually payment for services, such as advertising, and will be subject to GST if the sponsored entity is registered for GST.
10.b. Monetary sponsorship
Non-interpretative - other references (see general principles in
GSTR 2001/6 - Goods and services tax: non-monetary consideration and
GSTR 2012/2 - Goods and services tax: financial assistance payments).
If the entity supplying the service, such as advertising, is registered for GST it will be liable for GST on the supply. The entity paying the sponsorship fee will be entitled to an input tax credit of 1/11th of the payment if it is registered provided they hold a tax invoice. The sponsor may decide to increase the sponsorship to cover the GST liability.
10.c. Non-monetary sponsorship
Non-interpretative - other references (see general principles in GSTR 2001/6 - Goods and services tax: non-monetary consideration).
If a sponsor provides goods and services in return for other goods and services, such as advertising or promotion, there is a supply by both parties to each other. If both parties are registered for GST, each will be liable to pay GST on the supply to each other. The GST will be 1/11th of the GST-inclusive market value of the supply made by the other party.
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