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Sponsorship is generally subject to GST as it is usually provided in return for advertising services. However, if the sponsorship does not result in a "material benefit" for the external party providing the sponsorship, then the funding may be considered a donation and outside the scope of GST

Contra transactions on sponsorship

Occasionally sponsorship (or other in kind services), rather than cash, will be exchanged for sponsorship. If both parties are registered for GST, then:

both parties must supply tax invoices to the other (and are liable for GST of 1/11of the GST inclusive market value of the sponsorship / in-kind service); and

both parties must hold tax invoices in order to claim input tax credits.

Examples include:

  • advertising of the University on the radio/television/newspaper provided in exchange for storage space in the University premises (unless they qualify as Donation)



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