Flying QF on AA FF number - getting an upgrade process?

[Yada Yada]

I select "US and others" and avoid a tax for which there is no liability if ticketed outside of Australia

Just below the field where you select "U.S. and others" is the following note:

Note: If you are not a resident of the U.S., Canada, U.K., or select countries in Latin America or the Caribbean, tickets cannot be purchased online but may be placed on hold for purchase at an AA airport or ticket office.

I think it is fair to say that Australian residents should not be purchasing QF tickets on AA.com. The fact that you can does not make it ethical.

 

[Dave Noble]

Just below the field where you select "U.S. and others" is the following note:


I think it is fair to say that Australian residents should not be purchasing QF tickets on AA.com. The fact that you can does not make it ethical.

Hmm...Minor point. I am also a UK Resident

Dave

 

[serfty]

... The fact that you can does not make it ethical.

The fact that the AA office has recently been closed is an issue that needs consideration.

 

[Dave Noble]

The fact that the AA office has recently been closed is an issue that needs consideration.

Not too much of an issue for e-tickets. The AA N Sydney office was supposed to close but was given a reprieve since they hadnt sorted out a ticketing location so may still be open

I don;t think that AA is planning to leave Australia without any ticketing facilities

Dave

 

[Mal]

I think it is fair to say that Australian residents should not be purchasing QF tickets on AA.com. The fact that you can does not make it ethical.

Moral Schmoral

Nothing stopping an Australian resident from putting the tickets on hold and later ticketting them through Sydney.

Rumour has it that Australians may soon be trusted by AA - although, I'll still be suprised by it when it happens.

I may live in London in certain parts of the year (the benefit of having family over there!) Similarly, I'm sure I can set up a mailing address in the U.S if I really want to.

 

[oz_mark]

Since my travel is always funded internally by my company, there is no such ethical issue involved. I just wish my cost centre and my travel expense reports reflected the net cost and not the published list price.

Herein lies an issue I am sure is faced by many people. I know for me, any rebate the company may get never gets back to the project the travel was spent on. As far as I can tell it never even gets back to my business units cost centre. I don't know where it goes. Where needed, the client is charged the invoiced amount as that is the only amount I can possibly identify.

 

[Altair]

Herein lies an issue I am sure is faced by many people. I know for me, any rebate the company may get never gets back to the project the travel was spent on. As far as I can tell it never even gets back to my business units cost centre. I don't know where it goes. Where needed, the client is charged the invoiced amount as that is the only amount I can possibly identify.

I totally agree, my projects never receive the discounted price, yet when I do my budgets and expenses which I am responsible for I cannot use the best available price.:evil:
I do know where the rebates went to for one company I worked for as I was later an internal auditor and discovered that the Strategic Sourcing and Purchasing unit cost centre received all the rebates. When I enquired about this and the fact that there were no entries distributing the rebates out to the various business units that purchased the goods. The reply was that the SS&P unit ran projects, eg. getting the airlines or travel agenices to tender for contracts or even stationery supplies and the SS&P unit would retain all the savings as the business case was theirs. This had lead to announced savings for the company, due to a new contract, but the business units often paid a higher price as they only saw the invoiced amount and not the rebates. Oh the SS&P unit was not a cost centre but a very nice profit centre....

 

[NM]

Herein lies an issue I am sure is faced by many people. I know for me, any rebate the company may get never gets back to the project the travel was spent on. As far as I can tell it never even gets back to my business units cost centre. I don't know where it goes. Where needed, the client is charged the invoiced amount as that is the only amount I can possibly identify.

I guess one benefit for me, the traveller, is that I get more Diners Club points for the inflated initial purchase price .

 

[Yada Yada]

Moral Schmoral

Nothing stopping an Australian resident from putting the tickets on hold and later ticketting them through Sydney.

Yeah, but then you'd be charged GST, no?

 

[JohnK]

Yeah, but then you'd be charged GST, no?

Would be interesting to see whether the ATO, if they knew of this loophole, would condone the practice of a foreign company selling a service provided by an Australian company to Australian residents without charging GST.

 

[NM]

Would be interesting to see whether the ATO, if they knew of this loophole, would condone the practice of a foreign company selling a service provided by an Australian company to Australian residents without charging GST.

The ATO has no jurisdiction to collect GST (or any other form of taxation) from a foreign company for a transaction enacted outside Australia. So how the ATO views this is not relevant.

If the ATO wished to lobby the government to enact a law that deems that purchasing a service from a foreign company for delivery in Australia involves the importation of a service and such importation should be taxed (in a similar way to the taxation/duty imposed on the importation of goods), then it would be up to the purchaser to pay the "service importation tax" to Australian Customs (the body that collects importation taxation and duties) and not for the foreign company selling the service to collect GST on behalf of the ATO as would be the case for the sale of a service by an Australian company for delivery in Australia.

And under the current policy of enforcement of importation taxes and duties that appears to be applied by Australian Customs, small values of taxation are not collected. For example, if I purchase an item on-line from a foreign company with a value of say $200 and have it delivered directly to my Australian postal address, it is my experience that Australian Customs will not seek to collect $20 from me. But if I was to import an item with a value of say $1000, Australian Customs are likely to instruct Australia Post to collect $100 from me before delivering the item to me.

So it may be reasonable to assume a similar policy of minimum value collection may also apply to the hypothetical "service importation tax" suggested above.

 

[Dave Noble]

Would be interesting to see whether the ATO, if they knew of this loophole, would condone the practice of a foreign company selling a service provided by an Australian company to Australian residents without charging GST.

It is not a loophole!

In the tax rules, it specifically states that the UO tax applies as follows

NAME: GOODS AND SERVICES TAX
CODE: UO
AMOUNT: 10 per cent Goods and Services Tax is applicable to the total value * of all Tickets,MCO’s, PTA's for wholly domestic travel, ie. including any (other) ticket taxes shown thereon.

* round to the nearest 1cent (see W1-8 domestic ticketing example)
EXEMPTIONS:
1. Domestic travel in conjunction with international air journeys and shown on the same ticket.
2. Domestic travel sold in conjunction with international air travel but on a separate ticket where the domestic ticket is cross referenced to the international ticket and the domestic ticket is issued prior to the commencement of the international journey.
3. Domestic travel ticketed outside Australia.
4. Infants.

Exemption 3 quite clearly shows that any ticket issued outside of Australia for domestic travel is exempt GST.

Dave

 

[Altair]

Yes it is quite clear regarding Exemption 3. If this was NOT listed then there would be a question regarding buying tickets via a non-Australian webiste is tax evasion, however Exemption 3 removes the question.

 

[simongr]

You reckon the guy who wrote the legislation knew about the Airline Tickets and Airline Reservations from American Airlines | AA.com option? Seems pretty ridiculous otherwise :shock:

 

[Mal]

You reckon the guy who wrote the legislation knew about the Airline Tickets and Airline Reservations from American Airlines | AA.com option? Seems pretty ridiculous otherwise :shock:

Quite common for overseas tourists to buy their domestic travel overseas via their travel agency as part of their reservations.

 

[Yada Yada]

It is not a loophole!

In the tax rules, it specifically states that the UO tax applies as follows

Exemption 3 quite clearly shows that any ticket issued outside of Australia for domestic travel is exempt GST.

I wouldn't mind betting that the ATO did not anticipate that Australians might be able to purchase airline tickets on the Internet from a foreign airline for travel wholly within Australia on an Australian domestic airline and thereby avoid paying GST.

In essence, you are purchasing an Australian product that is supplied within Australia and will be consumed within Australia. In which case it probably is a loophole, just one that has not been dealt with yet.

If I set up an Internet-based travel agency and had it hosted on a USA webserver so that the "ticketing" physically occurred outside the country, could I avoid charging GST to Australians? Likewise if I was selling t-shirts in the same manner and raised the actual sale invoice and credit-card charge via an off-shore server but the actual supply of the product happened inside Australia, would that enable me to avoid charging GST?

The Internet has introduced some interesting challenges in the areas of taxation and copyright. The various governing bodies are yet to get these things straightened out. I wouldn't mind betting that if the ATO knew what was happening and felt that significant revenue was being lost, it might take AA to court for lost GST income.

 

[Mal]

The Internet has introduced some interesting challenges in the areas of taxation and copyright. The various governing bodies are yet to get these things straightened out. I wouldn't mind betting that if the ATO knew what was happening and felt that significant revenue was being lost, it might take AA to court for lost GST income.

One word - EBAY !!

Although the ATO has started looking into the high sales customers/sellers of Ebay to see what tax they may be incorrectly avoiding...

 

[NM]

If I set up an Internet-based travel agency and had it hosted on a USA webserver so that the "ticketing" physically occurred outside the country, could I avoid charging GST to Australians? Likewise if I was selling t-shirts in the same manner and raised the actual sale invoice and credit-card charge via an off-shore server but the actual supply of the product happened inside Australia, would that enable me to avoid charging GST?

Its not quite that simple. As a travel agent you would not actually be issuing the tickets yourself. You would be making the sale but relying on an airline to actually issue the ticket for you using that airline's ticket stock. So if you established your internet-based travel agency and used AA (using the 001 ticket stock) or some other airline to issue the ticket outside Australia, then there would be no GST payable.

But if you had Qantas issue the ticket, chances are that they would be issuing the ticket in Australia and hence GST would be payable.

It makes no difference where the money is collected. It makes all the difference where the ticket is issued.

 

[Yada Yada]

It makes no difference where the money is collected. It makes all the difference where the ticket is issued.

How about it it's an e-ticket generated off-shore?

 

[NM]

How about it it's an e-ticket generated off-shore?

e-ticket or paper ticket makes absolutely no difference. Both are issued by an airline, not by the travel agent. They use the same ticket number "stock" for issuing an e-ticket or a paper ticket.

You can tell which airline has issued the ticket by the first 3 digits of the ticket number (e-ticket or paper ticket). If it starts with 081 then Qantas has issued the ticket. If it starts with 001 then AA has issued it. Each airline has their own "plate" number for issuing tickets. These are allocated to the issuing authority by IATA.

I suppose it is possible for a non-airline entity to apply to IATA for a ticket issuing capability. But I am not aware of any travel agents with their own issuing ability.