GST/VAT in Microsoft-managed countries

Hi  alexdrenea-ms 

Thanks very much for your reply.

Without wanting to go too deep into this question, there are a couple of factors that are probably worth highlighting:

1. Under the Microsoft Publisher Agreement (8.0 July 2024 update), publishers agree to “appoint Microsoft as your agent or commissionaire, as applicable, for the purpose of facilitating Customer purchases through the Commercial Marketplace.”
2. The Publisher Agreement also includes the following: “You and MRS or MPL (as the case may be) agree for purposes of Section 84-60 of A New Tax System (Goods and Services Tax) Act 1999 (the "AU GST Act"): (A) Section 84-55 of the AU GST Act applies to sales of your Offers made available by you through the Commercial Marketplace as if such sales were an inbound intangible consumer supply; and (B) for the purposes of the AU GST Act, MRS or MPL (as the case may be) is treated as the supplier of and as making the supply for consideration for which it was made.” This relates to “inbound intangible consumer supply”  which excludes an enterprise that the supplier carries on in the indirect tax zone, which is defined as Australia.  In other words, Microsoft acts as the supplier for the purposes of the GST Act for publishers outside Australia, but the agreement is silent as it relates to publishers inside Australia.
3. For an Australian publisher appointing Microsoft as its agent (in 1 above) it seems the Australian GST rules would apply. For an agent who resells, it seems that Goods and Services Tax Ruling GSTR 2000/37 (https://www.ato.gov.au/law/view/document?docid=GST%2FGSTR200037%2FNAT%2FATO%2F00001&document=document   ) applies which requires a supplier (publisher) to charge its agent (Microsoft) GST on its supply.  The agent then charges GST to the end customer.  The agent then remits GST calculated as the net amount of the GST it charged the customer and what it paid in GST to the supplier.  The supplier then remits GST based on the amount of GST it charged to the agent.

On the basis of the above, I don’t think I can consider the income I get in my bank account as Net income but rather as Gross income.  When I complete a Business Activity Statement, the first line is amounts received and GST is due on that amount.  There does not seem to be a capacity to claim some form of credit for GST paid by an agent.

I suspect I am not the only ISV in Australia with a published App that is selling to Australian customers.  So, I may be missing something the GST rules. 

Thanks again

Ken