Australian GST (Goods and Services Tax) is a goods and services tax, which refers to a broad-based 10% tax on most goods, services and other items sold or consumed in Australia. Businesses that are non-resident entities carrying on business and selling business in Australia are entitled to register and obtain an ABN.
The first understanding of Australian GST - tax rate
The tax rate of GST in Australia is 10%, which means that GST is charged to Australian consumers for 1/11 of the sales amount, that is, the sales are tax inclusive.
For example: after registering GST, a product wants to sell for $5, so the target price for the customer needs to be $5.5, and the GST tax for a product sold to the tax bureau is $0.5.
Whether overseas enterprises need to register GST in Australia
(1) Non-resident (overseas) enterprises that meet the following two conditions must register for Australian GST:
'Launch a business or operate commercial activities in Australia;
Your Australian consumer-related GST sales amount is equal to or greater than the registered turnover threshold of AU $75,000 (AU $150,000 for Non-profits).
Note: GST applies to Australian-related sales, i.e. goods and services provided to Australian consumers. Include the following aspects:
✅ Provision of imported services to Australian consumers (e.g. professional advisory services)
✅ Digital products (e.g. software, e-books);
✅ low-value goods (value 1000AUD or less) imported from overseas direct mail, except tobacco and alcoholic beverage products;
✅ sells imported goods stored 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 may choose to register for GST voluntarily, but if you choose to register voluntarily, you must keep it for at least 12 months before you can cancel it.
Important: A non-resident business sells imported services and digital products to Australian consumers and sells low value imported goods with direct mail. If all such sales are made to Australian consumers through a third party sales platform, you may not need to register for GST as these sales will be withheld by the sales platform.
(2) If you are a non-resident enterprise (such as an independent station) of an online e-commerce platform (also known as EDP), you need to declare and pay GST tax under the following circumstances, which belongs to the e-commerce platform (EDP) responsible for GST:
⏩ You are registered or must be registered for GST;
⏩ This is overseas direct mail for the sale of low value imported goods (AUD $1,000 or less) to Australian consumers;
⏩ You or the merchant help to ship the goods to Australia;
⏩ sells imported services or digital products to Australian consumers;
An EDP operator may also agree to be responsible for GST for sales made through its platform by Australian merchants if all of the following conditions are met:
▶ Sales are digital products or digital services made electronically.
▶ The EDP operator signed a written agreement with the merchant before making the sale.
▶ EDP operator has registered GST.
However, the following goods are subject to different GST rules:
Zero-rate goods (e.g. food and beverages, medical services, medical AIDS, educational course materials with special certification, motor vehicles and auto parts for persons meeting special conditions)
Any GST, customs and clearance charges are charged by the importer at the border for consignment of imported goods in excess of A $1,000.
Alcohol or tobacco products, taxes will be levied at the border.
If a non-resident enterprise registers for GST, how will it comply?
(1) Register the Australian GST tax number;
(2) collect GST from Australian consumers;
(3) File a Business Activity Statement (BAS) or GST return with the Australian Tax Authority;
(4) pay GST to the Australian Revenue Board;
(5) Ensure that correct information is provided to customers and included in customs documents.
What is the difference between simplified registration and standard registration for GST in Australia?
If you are a non-resident enterprise, you may choose different registration methods according to your business needs, and the identity registration documents you need to provide may be different.
(1) Simplified GST registration applies to:
▶ Providing imported services and digital products to Australian consumers;
▶ Importing low value goods (AUD $1000 and below) into Australia.
Use simplified GST registration if you
▶ No need for ABN;
▶ Connect sales to Australia;
▶ Sales of imported services, digital products or low-value imported goods;
▶ Wants fast and easy electronic registration, reporting, and payment;
▶ Do not want to do enterprise identity notarization when registering;
▶ No need to claim GST credit (including taxable import credit).
(2) Standard GST registration is applicable to the following non-resident enterprises:
▶ Have or need ABN;
▶ Compliance supply sales in Australia;
▶ Need to issue tax invoice;
▶ I want to apply for GST credit.
How to choose the two registration methods of Australian GST?
⏩ If you are a non-resident business, you can choose between simplified or standard registration.
⏩ If you are a non-resident business importing and warehousing goods in Australia prior to selling them directly or through an electronic distribution platform, you are not able to make a simplified GST registration. As the goods are located in Australia, you will be liable for GST on the goods sold. Instead, a standard GST registration will enable you to meet your GST obligations and allow you to claim an import GST credit arising from taxable imports.
When should I register for an Australian GST?
If you are not registered for GST, check every month to see if you have reached your threshold or are likely to exceed it. You need to register within 21 days of 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 AUD 75,000 or more (EUR 150,000 or more for non-profit organizations)
▶ Your "projected GST turnover" (your total turnover for this month and the next 11 months) is likely to be AU $75,000 or more (AU $150,000 or more for non-profit organizations).
After registering GST, do I need to pay the previous tax?
You can apply to backtrack your GST registration.
For tax periods beginning on or after July 1, 2012, the retroactive date of GST registration is limited to four years.
How often do I need to declare GST?
I. Simplified deadline for GST declaration and payment
Quarterly filing and payment deadlines are as follows:
2. Standard GST declaration and payment deadline
① The turnover is not less than AUD 20 million; The deadline for monthly declaration and payment shall be the 21st day of the next month after the end of the taxable end period.
② Turnover < AUD 20 million, quarterly declaration, quarterly declaration and payment deadline (see the table below);
③ Businesses with a voluntary GST registration and a turnover of less than $75,000 can choose the annual report. The deadline for filing and payment of the annual report is October 31. If you do not need to submit a tax return, the deadline is February 28 after the annual tax period.
If you want to expand into the Australian market, it is especially important to be familiar with the rules of GST, as GST is often an important factor in pricing.
Regarding the Australian Goods and Services Tax, we will continue to update in the future. Welcome to continue to follow.