International tax experts at Ernst & Young have analyzed the local tax code and international tax treaties with Australia to establish the following tax guidelines for RecruitiFi hires within Australia.
AUSTRALIA GENERAL CONSIDERATIONS
How does RecruitiFi supply its services to Employers in Australia?
Before diving into the FAQs, let’s clarify the legal tenets underpinning RecruitiFi’s business model:
RecruitiFi’s base of operations: RecruitiFi is a US-based entity with no physical presence beyond American borders.
Distinct legal relationships: In line with the terms and conditions outlined for our business operations in Australia, we establish two separate and exclusive agreements:
A service agreement between RecruitiFi and the Employer, for the supply of services by RecruitiFi to the Employer
A service agreement between RecruitiFi and the Recruiter, for the supply of services by the Recruiter to RecruitiFi
Payment process: The transaction process entails Employers paying RecruitiFi for the services rendered, and subsequently, RecruitiFi paying the Recruiter for its services.
Absence of direct interactions: There are no direct contractual or monetary exchanges between the Employers and Recruiters.
Recruitment procedure: Should an Employer decide to recruit a Candidate via the RecruitiFi platform, the employment process ensues without involvement from RecruitiFi.
Precedence of terms: In cases where an Employer and an Agency have had prior contracts, the terms stipulated by RecruitiFi will supersede these existing contracts for the period of engagement through RecruitiFi.
For more information, see Terms | RecruitiFi.
AUSTRALIA CONSIDERATIONS FOR EMPLOYERS
This section of the FAQ applies to Employers in Australia to that acquire services from RecruitiFi.
Will RecruitiFi charge GST to Employers?
No. RecruitiFi will not charge GST to AustralianEmployers, provided that the Employer shared their Australian Business Number (“ABN”) and adeclaration that the Employer is GST registered.
RecruitiFi will take reasonable steps to verify that the ABN belongs the Employer and that it’svalid. This check includes a validation of the ABN provided through ABN Lookup (business.gov.au)
This in accordance with Ruling GSTR 2017/1 that’s about when an overseas-based supplier is making supplies that are connected with Australia.
How can an Employer communicate its ABN and confirm that the Employer is GST registered?
To communicate your GST number to RecruitiFi, please email finance@recruitifi.com.
Why does RecruitiFi charge no GST on its services if an Employer provided an ABNand a confirmation that it’s GST registered?
RecruitiFi is a non-resident business in Australia that supplies a service to a recipient based in Australia.
The supply of services by RecruitiFi will only besubject to GST where the Employer is an “Australian consumer.”
An “Australian consumer” is an Australian resident who either is not registered for GST or, if they are registered for GST, they do not acquire the services in their business capacity.
Therefore, if an Employer provided RecruitiFi with a valid ABN and confirmed that the Employer is GST registered, no GST will be charged.
The legislative reference for this can be found in s9-25(5) of the AU GST Act
Does it matter where the Recruiter, Candidate, or JobCast is located?
No, this does not matter. Other factors, such as the location of the Recruiter, Candidate, and/or JobCast does not change the GST treatment.
The GST treatment is determined by the nature of RecruitiFi’s services and location of the RecruitiFi as service provider and the Employer as service recipient, the location of Recruiter, Candidate, and/or JobCast are not relevant to determine the GST treatment.
The legislative reference for this can be found in s9-25(5) of the AU GST Act
Does an Employer have to share some sort of tax documentation?
For RecruitiFi not to charge GST to Employers, the Australian Taxation Office requires that RecruitiFi collects an ABN from the Employer, along with a declaration that the Employer is registered for GST.
The ABN is generally used as the GST registration number in Australia. The 11-digit ABN is structured as a 9-digit identifier with two leading check digits i.e., commonly displayed in the format “XX XXX Job Casts XXX."
What if an Employers does not provide the proper tax documentation?
For Australian Employers that do not provide an ABN and a confirmation that the Employer is GST registered, RecruitiFi will charge GST in addition to its fees.
In accordance with RecruitiFi’s Terms, all fees that are agreed between RecruitiFi and Employers are exclusive of GST and other taxes. As such, if the proper tax documentation is not provided, RecruitiFi will charge GST in addition to Employer Placement Fee and other fees.
Is RecruitiFi required to issue invoices to Employers in Australia?
There is no requirement for RecruitiFi to issue a GST invoice to Employers in Australia.
Legislative reference: s84-65 and 84-50 of the GST Act
AUSTRALIA CONSIDERATIONS FOR RECRUITERS
This section of the FAQ applies to Recruiters in Australia that supply services to RecruitiFi.
Will a Recruiter charge GST to RecruitiFi?
No, services provided by Australian Recruiters to RecruitiFi are GST-free, i.e., zero rated.
Why are services from a Recruiter not subject to GST in Australia?
The services provided to RecruitiFi by Australian Agencies are GST-free on the basis that RecruitiFi is a non-resident, and the services are neither work physically performed on goods in Australia nor directly connected with real property in Australia.
Legislative reference: Item 2 of s38-190 of the AU GST Act.
Does anything change depending on where the Employer, JobCast and/or Candidate is located?
No, other factors, such as the location of the Employer, Candidate and/or JobCast, do not change the GST treatment as explained above.
The GST treatment is determined by the nature of the Recruiter’s services and location of the Recruiter as service provider and RecruitiFi as service recipient, the location of Employer, Candidate, and/or JobCast are not relevant to determine the GST treatment.
Is the service subject to any other taxes?
No, RecruitiFi will not pay any GST or other taxes to Recruiters in Australia.
In this regard, the RecruitiFi Terms stipulate that any Agency Placement Fee and other fees payable to Recruiters are inclusive of any GST and other taxes.
GLOSSARY
Term | Definition |
RecruitiFi | RecruitiFi, Inc. |
JobCast | Job positions to be filled by Candidates that are submitted/suggested by Recruiters to RecruitiFi |
Recruiter | Recruiters and agencies that provides services to RecruitiFi by submitting/suggesting Candidates to fill JobCasts |
Employer | Employers that hire the services from RecruitiFi to receive the suggested Candidates by RecruitiFi to fill their JobCasts |
Employer placement fee and processing fees | Fees paid by employer to RecruitiFi — if certain conditions are met — upon hiring a Candidate |
Agency placement fees | Fees paid by RecruitiFi to Recruiter — if certain conditions are met — upon placement of a Candidate suggested by the Recruiter |
VAT | Value-added tax; please note “VAT” will be understood to include all non-US indirect taxes (e.g., VAT, GST, JCT) |
AU GST Act | Goods and Services Tax Act 1999 |
5. DISCLAIMER
The information in these frequently asked questions (FAQs) is intended to provide general guidelines regarding the indirect tax treatment of RecruitiFi Inc.’s (“RecruitiFi” or “we”) procurement of Services from Recruiters and supply of Services to Employers in the countries here covered.
The information in these FAQs is provided by Ernst & Young LLP (EY) and is solely provided for the use of RecruitiFi. The information that EY provided to RecruitiFi is to be understood based on a “should” level of advice regardless of any wording (such as “is“ or “will”) referenced in the information provided to RecruitiFi or as reflected in the FAQs.
The FAQs reflect how, in general, i.e., not in specific cases, RecruitiFi believes the local indirect tax rules apply to RecruitiFi’s business model and services supplied by Recruiters to RecruitiFi and services provided by RecruitiFi to Employers.
The FAQs for individual Member States in the European Union (EU) are not based on the individual Member State’s value-added tax (VAT) legislation. Instead, this information is based on VAT rules as included in Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT (the EU VAT directive). As the implementation of the rules in the EU VAT directive into the legislation of an individual Member States may vary country by country and/or the interpretation and corresponding guidance in relation to these rules may also be different between EU Member States, it’s possible that the FAQs for an individual EU Member State may not fully reflect the VAT rules of that EU Member State.
Recruiters, Employers and/or any party other than RecruitiFi cannot, in any form, rely on advice provided by EY to RecruitiFi. Recruiters and Employers are encouraged to consult their own (indirect) tax advisor to confirm the indirect tax treatment as applicable in their specific case as the application and impact of tax laws can vary widely, from case to case, based upon the specific or unique facts involved that are not known to RecruitiFi and/or EY. If your (indirect) tax advisor’s advice does not correspond with the position as outlined in the FAQs, please reach out to RecruitiFi’s tax team.
While RecruitiFi used its best efforts in preparing these FAQs, RecruitiFi makes no representations or warranties with respect to the accuracy or completeness of the content in the FAQs. Neither EY nor RecruitiFi shall be liable for any damages in relation to the information included in the FAQs. Note also that inadvertent errors can occur, and tax rules and regulations often change.
Latest update: January 2025