Australian GST (Goods and Services Tax) is a goods and services tax, which refers to a broad tax of 10% levied on most goods, services and other items sold or consumed in Australia. Businesses that are non-resident entities may be entitled to register and receive an ABN if they conduct and sell business in Australia.
Australia GST - Tax Rates
The Australian GST rate is 10%, which means that the GST is 1/11th of the sales amount charged to Australian consumers, i.e. the sales are taxed sales.
For example: after registering GST, a product wants to sell $5, then the selling price to the customer needs to be $5.5, sell a product, the GST tax fee to the tax office is $0.5.
Do foreign businesses need to register for GST in Australia?
(1) Non-resident (offshore) businesses must register for Australian GST under the following two conditions:
➡ Are starting a business or running a commercial activity in Australia;
➡ your business's GST sales relating to Australian consumers are equal to or greater than the registered turnover threshold of A$75,000 (A$150,000 for not-for-profit organizations).
Note: GST applies to Australia-related sales, i.e. goods and services provided to Australian consumers. This includes these areas below:
✅ Provision of imported services to Australian consumers (e.g. professional advisory services)
✅ Digital products (e.g. software, e-books);
✅ Offshore direct mail imports of low-value (value 1000AUD and below) goods, except tobacco and alcoholic beverage products;
✅ Sale of imported goods warehoused in Australia;
✅ Real estate, such as land, residential and commercial property in Australia.
If your GST turnover is less than AUD$75,000 (AUD$150,000 for non-profit organizations), you can choose to voluntarily register your GST, but if you choose to voluntarily register, you must maintain it for at least 12 months before it can be cancelled.
IMPORTANT: Non-resident businesses selling imported services and digital products to Australian consumers, selling direct mail low-value imported goods, may not need to register for the GST if all of these sales are made to Australian consumers through a third-party sales platform, as the GST will be withheld and paid on behalf of these sales by the sales platform.
(2) If you are a non-resident business (e.g. stand-alone site) on an online e-commerce platform (a.k.a. EDP), you are required to file a GST return and pay GST if the following circumstances exist, which are the responsibility of the e-commerce platform (EDP) for GST:
⏩ You have registered or must register for GST;
⏩ This is offshore direct mail selling low value imported goods (A$1,000 or less) to Australian consumers;
⏩ You or the merchant help ship the goods to Australia;
⏩ Selling imported services or digital products to Australian consumers;
The EDP Operator may also agree to be liable for the GST on sales made by Australian Merchants through its platform if all of the following conditions are met:
▶ Sales are digital products or digital services produced electronically.
▶ The EDP Carrier enters into a written agreement with the merchant before making a sale.
▶ The EDP operator is registered for GST.
However, different GST rules apply to the following items:
Goods subject to a 0% tax rate (e.g. food and beverages, medical services, medical aids, specially certified educational materials, motor vehicles and motor vehicle accessories for persons who meet special conditions).
For consignments of imported goods over AUD$1,000, any GST, customs duty and clearance fees are charged by the importer at the border.
For alcohol or tobacco products, the tax will be collected at the border.
If a non-resident business registers with GST, how can it comply?
(1) Register an Australian GST code;
(2) Collecting GST from Australian consumers;
(3) File a Business Activity Statement (BAS) or GST return with the Australian Taxation Office;
(4) Payment of GST to the Australian Taxation Office;
(5) Ensure that correct information is provided to the customer and included in the customs documentation.
What is the difference between simplified and standard registration of GST in Australia?
If you are a non-resident enterprise, depending on the needs of your business, you will need to provide different identification documents for registration if you choose a different method of registration.
(1) Simplified GST registration is applicable to the following businesses:
▶ In providing imported services and digital products to Australian consumers;
▶ Importing low-value goods (A$1,000 and below) into Australia.
Use the simplified GST registration if you
▶ ABN is not required;
▶ Connecting sales with Australia;
▶ Selling imported services, digital products, or low-value imported goods;
▶ Want to register, report, and pay electronically quickly and easily;
▶ You do not want to notarize your business identity when registering;
▶ No GST credit (including taxable import credit) is required.
(2) Standard GST registration applies to the following non-resident businesses:
▶ ABN is owned or required;
▶ Compliance supply sales in Australia;
▶ A tax invoice is required;
▶ Want to apply for GST credit.
What are the two options for GST registration in Australia?
⏩ If you are a non-resident business, you can choose between simplified or standard registration.
⏩ Simplified GST registration is not available if you are a non-resident business that imports and warehouses merchandise in Australia before selling it directly or through an electronic distribution platform. As the goods are located in Australia, you will be liable for GST on the goods sold. Instead, standard GST registration will enable you to fulfill your GST obligations and allow you to claim import GST credits for duty-paid imports.
When should I register for Australian GST?
If you have not registered for GST, check monthly to see if you have reached the threshold or if you are likely to exceed it. You need to register within 21 days of your GST turnover exceeding the relevant threshold.
You will reach the GST Turnover Threshold if any of the following occurs:
▶ Your 'current GST turnover' (your turnover for the current month and the previous 11 months) totals A$75,000 or more (€150,000 or more for not-for-profit organizations).
▶ Your 'Estimated GST Turnover' (your total turnover for the current month and the next 11 months) may be A$75,000 or more (A$150,000 or more for not-for-profit organizations).
After registering for GST, do I need to pay the previous tax?
You can apply to backdate your GST registration.
For tax periods beginning on or after July 1, 2012, there is a four-year limit on the backdating of GST registrations.
How often do I need to declare GST?
I. Simplified GST Declaration and Payment Deadline
Quarterly returns, returns and payment deadlines are as follows:
II. Standardized GST Declaration and Payment Deadline
① Turnover ≥ AUD 20 million; filed on a monthly basis, the deadline for filing and payment of the monthly return is the 21st day of the month following the end of the taxable period;
② Turnover < AUD 20 million, quarterly reporting, filing and payment deadlines for quarterly reports (see table below);
③ Businesses that voluntarily register with GST and have a turnover of less than $75,000 can choose to file an annual report. The deadline for filing and payment of the annual report is October 31st, or February 28th after the annual tax period if you are not required to file a tax return.
Familiarizing yourself with GST rules is especially important if you're looking to expand into the Australian market - after all, GST is often an important factor to consider when setting prices.
We will continue to update you on the Australian GST.
About Green Circle
Green Circle is an Amazon SPN tax service provider, is also the first batch of domestic service providers to get the Australian GST tax number, and has a number of successful cases under the number. The registration time is 1-4 weeks, if you have related needs, or have any questions about Australian tax, welcome to consult the green circle sister.
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