Q: M company, jointly owned by Australian and UK shareholders, does similar business in both countries under the same brand. M company, based in Australia, hires a digital marketing agency for advertising design. It then passes on some of the design costs to the UK company. Does the UK company need to pay GST for the design services?
A: No, it doesn't. When M company passes on the design costs to the UK company, it's acting as a middleman. The design service is essentially provided directly to the UK company, which makes it exempt from GST according to GST laws. Therefore, the UK company doesn't need to pay GST for the on-charged design service.
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