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Strategy for Recouping VAT and the FIFA Women's
World Cup

January 10, 2023

The 2018 FIFA Women's World Cup is not only a huge opportunity for companies, but also a major draw for fans and visitors. Don't allow the inconvenience of goods and services tax (GST) refund claims prevent you from enjoying the 2023 World Cup to the fullest. How? Read on!

Australia and New Zealand are the first countries in history to co-host the FIFA Women's World Cup. Businesses are gearing up to score their own goals in front of an estimated crowd of around 1.2 million.

Minister for Sport and Recreation Grant Robertson said, "Hosting an event of this size would bring considerable social and economic advantages." What does this imply for your company, and what steps can you take to make the most of the situation?

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A Primer on the Goods and Services Tax and the World Cup

As a global company getting ready for the World Cup, spending money is unavoidable. Nevertheless, hope is not completely gone. In order to facilitate the recoupment of goods and services tax (GST) credits by international companies, Australia has established a reclaim mechanism that does not need initial registration in Australia (input VAT).

But the process of reclaiming and registering is still hard to understand, and it varies from letting non-resident businesses register on their own to making registration mandatory for businesses that make more than a certain amount.

Here is all you need to know about GST during the World Cup to make the most of the reclaim opportunity and guarantee that all costs yield a good return on investment.

The First Question: What is GST?

GST is a 10% tax levied on the majority of goods and services sold in Australia. If you run a business outside of Australia and your costs include GST, you may be able to get some of your money back.

But international businesses that want to get their GST back must make sure they are following the rules set by the Australian Tax Office.

As a foreign company preparing for the 2018 World Cup, it may be difficult to independently negotiate the requirements of the Tax Office and register for GST recovery. However, we have outlined some key concepts to help you out.

Where to Look for A-Listers: Which Businesses Can Claim GST?

Foreign suppliers of products and services to Australian customers may be required by law to register for GST. Products sold inside Australia and services rendered there fall under this category. For example, if an international businessman brings the products from overseas and sets them up or assembles them in Australia,

However, if you are a broadcasting agency, a sponsor, a sports organization and association, a team or an affiliate, you may recoup GST even if you haven't registered for it.

Guide to Goods and Services Tax Refunds

Companies that are not Australian residents have two options for reclaiming GST paid in Australia. Let's investigate this matter in further detail.

Option 1: Standard GST Registration

In order to collect GST credits, non-Australian businesses that have an Australian business number (ABN), issue tax invoices, and make supplies related to Australia may choose this option.

In Australia, these businesses need to register for GST if:

  • In other words, they are actively engaged in running a commercial operation.

  • A minimum of A$75,000 or A$150,000 (if a non-profit) in GST revenue was generated from sales associated with Australia.

The road, however, does not stop there. Companies must abide by a number of rules in order to maintain their GST registration, including the following.

Generally, the GST is included into the price of the items and services you provide for sale.

  • Reporting your GST activities by filling out a BAS on a monthly, quarterly, or yearly basis.

  • Recouping the GST that is already built into the cost of most company transactions.

 Voluntary Standard GST Registration

Businesses with a GST revenue of less than A$75,000 ($150,000 for non-profits) are not required to register for GST but are encouraged to do so. You must maintain your company's registration for a minimum of a year if you decide to do so.

Option 2: GST-only Registration

This option is for people who don't live in Australia but have a business or venture abroad and are eligible to claim GST refunds for Australian GST. This is often called "claim-only." However, keep in mind that with this option, businesses are not eligible for an ABN and do not make supplies to Australia.

When applying for GST-only registration, you must provide the following documents:

Proof that you are registered with a local authority in your home country that handles matters related to corporations, markets, and finances.

A letter confirming your existence and business operations from a foreign tax authority with a system similar to Australia's.

Halftime: What Makes a Sale a Sale?

We have this knowledge regarding filing, but what constitutes a sale is unclear. When selling products, a connection to Australia is established if they are:

  • Supplied to the buyer in Australia

  • Have been kicked out of Australia

  • Delivered in Australia, with the caveat that the vendor must have imported the products or assembled them there.

Requirement for Turnover Threshold

We have this knowledge regarding filing, but what constitutes a sale is unclear. When selling products, a connection to Australia is established if they are:

  • Supplied to the buyer in Australia

  • Have been kicked out of Australia

  • Delivered in Australia, with the caveat that the vendor must have imported the products or assembled them there.

Determine your GST Turnover

Your GST turnover is your entire business revenue (not profit) minus any of the following:

  • Online sales of services and digital items to GST-registered Australian enterprises

  • Sales of low-priced items to GST-registered Australian enterprises

  • Transactions unrelated to Australia

  • Include GST in your customers' purchases

  • Sales that are not taxed since they are not for payment.

  • Sales unrelated to the business you operate.

  • Input-taxed sales you make.

Post-World Cup: Cancellation of Registration

Can registrations be canceled after the World Cup? In short, absolutely.

The Australian Taxation Office permits non-residents to terminate their GST registration or Australian Business Number (ABN). But only if specified legislative conditions are met. 

Within 21 days, a firm may revoke its registration:

  • After selling or shutting the company

  • After changing the business structure (unless the old entity is still in operation),

  • If your annual GST revenue is less than the threshold for mandatory registration

When revoking GST enrollment:

  • A designated contact must inform the representative agent.

  • A company is required to file a final GST return or BAS and disclose all sales.

  • Companies must settle any outstanding debts.

Businesses simply need to revoke their ABN or GST registration.

Businesses are required to cancel at the end of their reporting month.

If a company is backdating its cancellation, they are required to tell their agent.

When May Your Registration Be Canceled?

Although the Tax Office will terminate your GST registration as of the date you provide, the date of cancellation may have repercussions for your firm. Since the FIFA World Cup lasts for a month, businesses must make sure that the day they choose to end their GST registration is the same day they want to be registered for the last time.

Reasons Why They May Decline Your Request to Cancel

The Tax Office imposes stringent cancellation rules for GST registrations. Businesses cannot revoke a registration:

  • The Tax office provides strict guidelines concerning the cancellation of GST registrations. Businesses cannot cancel a registration:

  • If the company is still registered for GST after the set cancellation date.

  • If a company continues to function and do business beyond the termination date.

  • If a firm has previously submitted an activity statement for the period that includes the cancellation date.

As your company concludes its World Cup participation, it will have spent significant costs. You cannot always include all of these costs on your tax return. 

Where is the Catch in Filing Tax Returns?

When it comes to recovering GST or VAT from different Tax Offices, there is usually a catch. Not all costs are completely deductible against VAT. To guarantee compliance with Australian Tax Office rules, it is essential to claim GST at the correct rate on acceptable business expenses. 

The End Game

Even though the Australian tax office still needs to put out mandatory instructions for businesses that are doing business because of the FIFA Women's World Cup, we can confirm that normal registration procedures apply both in Australia and abroad.

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