Financial Services

Sponsorships and donations

The University may receive funding from external parties, for example, scholarships, and as a condition, provide naming rights in exchange.


Such funding provisions, and other forms of sponsorship, are generally subject to GST as advertising/promotional services are exchanged for consideration. However, if the services provided by the University in exchange for the sponsorship do not result in a 'material benefit' for the external party providing the funding sponsorship, then the funding may be considered a donation and outside the scope of GST (refer to discussion of 'material benefit' under Donations).

Sponsorship income is also subject to GST where law firms sponsor mock courts in exchange for naming rights ("mooting income").

Receipt of bursaries versus scholarships

A bursary generally is paid as a lump sum directly from the funding body to the student. As the funds are not credited to the University, there are no financial or GST implications on the University.


A scholarship is generally paid to the student from the funding provider, with the University acting as the middleman. Generally, the receipt of the funding is subject to GST unless treated as a donation. If treated as a donation, the payment of the scholarship to the student will be out of the scope of GST.

Funding received for scholarships may be treated as donations only if no material benefit passes back to the donor.

Contra deals

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 1/11th of the GST inclusive market value of the sponsorship / in-kind service
  • 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 advertising space in University publications
  • catering services provided in exchange for advertising space in University publications
  • air flights provided in exchange for advertising space in University publications
  • where a research partner includes in a research agreement the provision of use of facilities and staff time in exchange for research or a share in research equivalent in value to the in-kind support provided.

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For a transaction to be subject to GST there must be, among other criteria, a supply of goods or services in exchange for monetary or non-monetary consideration. As donations do not involve an exchange of goods or services for consideration, they are generally outside the scope of GST.

To determine if a receipt is a donation, the nature of the benefactor and the nature and circumstances surrounding their payment must be considered. If the donor receives a 'material benefit' from the University (the beneficiary) for making the donation, the transaction is no longer considered a donation and it becomes subject to GST.

Material benefit

According to the ATO Issues log item E51 "A material gain or benefit would not include acknowledgements such as a mention in a newsletter or periodical, or a plaque if the plaque is a small cost and is not prominent. However, enlarging the acknowledgement into forms of advertising would result in a material gain or benefit flowing to the donor."

Individuals and foundations

Donations from individuals will generally be outside the scope of GST providing the individual receives nothing other than naming rights or progressive expenditure reports in return. However, should individuals receive intellectual property, or early result reporting, then the donation is potentially a GST taxable supply. Donations from foundations will be treated similarly to individuals.


Funding is received from individuals and organisations specifically for the payment of student prizes. Prizes may be offered directly to the student where the prize is not banked into the University bank account (the cheque is made out to the student). As the University merely selects the student there are no GST implications for the University.

Receipt of funding for prizes without naming rights passing back to the donor are considered as donations, and are therefore outside the scope of GST.

Receipt of funding for prizes with naming rights passing back to the donor may also be considered as donations, and outside the scope of GST if no 'material benefit' passes back to the donor.

In the event that the donor receives a material benefit, for example where the funding amounts to sponsorship, then the funding will be subject to GST.

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