Guide to Australia GST

Australian GST Rates

Australia’s Goods and Services Tax (GST) is a broad-based consumption tax of 10% that applies to almost all supplies of goods, services and other items sold or consumed in Australia. It is collected by businesses and paid for by the end consumer.

GST registration may require an initial registration for an Australia Business Number (ABN) depending on requirements. A GST registered business must then submit regular Business Activity Statements (BAS) to the Australian Tax Office (ATO).

There is no marketplace collect and remit in Australia.

B2C Distance Sales

< $ 1000 AUD Imported goods: No import Duty or Tax payable at the customs border.

> $ 1000 AUD Imported goods: Customs duties and import GST must be paid at the Australian customs border. No subsequent Sales GST.

The $ 1000 import value pertains to the value of an individual good specifically, rather than the total value of the shipment.

Example: If a total shipment is valued at $ 1200, but it is made of 3 items, each one costing 400, this shipment would still be subjected to the Low Value Imported Goods treatment.

Low Value Imported Goods

Goods with a value under $ 1000 AUD were previously exempted from GST entirely, but the Low Value Imported Goods (LVIG) GST law was introduced to level the playing field ford domestic and non-domestic sellers.

From 2018, goods with a value of 1000 AUD or less are still exempt from customs duties and import GST but are now subject to Sales GST where the seller has breached the 75,000 AUD threshold.

The 75,000 AUD threshold applies to the total net value of sales made in relation to Australia, including all B2C sales and applies on a 12-month rolling period.

Sellers can opt into registering when approaching the threshold.

Online marketplace facilitated sales are not subject to this 75,000 AUD threshold, as the OMP will be responsible for collecting and remitting on all transactions to Australia.

High Value Imported Goods

Imported goods with a value under over 1000 AUD are not subject to sales GST. These imports will instead be charged import VAT and duties at the border, which can be paid as an invoice. This means that if these fees are collected from the consumer and paid at this point, no GST registrations requirements arise.

Online marketplaces will generally not facilitate their transactions and will need to be handled via the courier.

Importing to make domestic sales

If a business imports into Australia to hold goods in a warehouse to make subsequent sales, they must still consider the $ 75000 threshold. All imported goods would be subject to import GST and duties, and once the threshold is breached, subsequent sales GST collection upon the point of sale.

All sellers conducting this kind of business must register for an ABN and for GST once breached. There is no online marketplace collection responsibility for domestic sales made within Australia.

Types of GST Registration

Simplified: a simplifies GST registration may be offered to sellers breaching the LVIG threshold by distance selling. This registration does not require an ABN. GST cannot be claimed as a credit under this registration.

Standard: sellers storing in Australia must use this registration. An ABN is required prior to registering for standard GST. GST credits can be claimed for taxable importations or purchases.

Deferred GST Scheme

Deferred GST (DGST) scheme allows GST due on imports to be paid via the BAS submission, rather than at the border, allowing it to be declared and reclaimed simultaneously, offsetting the liability to pay.

An application must be made to use this and is only available to eligible sellers with an ABN standard GST registration.

Importers using DGST must lodge BAS online on a monthly basis and pay electronically. DGST approval will be revoked if tax obligations are not met; users must ensure submissions and payments are made on time.

Representation Requirements

A non-Australian incorporated business is required to appoint a local tax representative in Australia to enable goods to be imported and exported. Representation enables a foreign entity to operate fiscally like a local company without the requirement of permanent establishment within Australia. The ATO will direct all communications to the registered agent.

Deregistration

Companies cannot deregister within 12 months of registering for GST in Australia. A registered entity has an obligation to notify the ATO within 21 days of requiring the deregistration.