Businesses Selling to Australia: Register Now for New Australian Tax Changes
Businesses selling low value goods from offshore to consumers in Australia should register now for goods and services tax (GST). GST will apply to those sales from 1 July 2018. GST is like a sales tax or VAT.
This new taxation measure ensures low value goods purchased by consumers in Australia will have the same tax treatment, no matter where they are purchased from.
The Australian Taxation Office (ATO) has opened a fast-tracked registration system for affected businesses, which include merchants, online marketplaces and goods re-deliverers. Businesses will have until 1 July 2018 to register and prepare to charge GST on goods valued at A$1,000 or less.
The simplified registration system is available at ato.gov.au/GSTSimpleReg. Businesses will only need to report Total Taxable Sales and GST, and pay once each quarter.
Businesses are required to register if they have a GST turnover of A$75,000 or more in a 12-month period.
Businesses will apply the 10 per cent GST to their products at the point of sale (i.e. on the supply of the good) and not at the point of importation, as currently happens with goods over A$1,000.
Businesses who sell through an online marketplace need to talk to their online marketplace operator to confirm how they will practically work together to implement the changes.
Only one entity is required to charge GST on a sale:
- if an online marketplace operator is responsible for GST on a sale, the merchant will not be responsible for GST
- if an online marketplace operator or the merchant is responsible for GST on a sale, a goods re-deliverer will not be responsible for GST.
- Visit the website for more information
Businesses can take the following steps to ensure that they will be able to comply
- Check to see if they meet the registration threshold of A$75,000 – find out what sales are counted towards the threshold on the ATO’s website.
- Consult tax professionals
- Consider changes to commercial documentation and pricing
- Request advice from the ATO
Businesses selling from offshore to GST-registered Australian businesses do not need to collect GST on these sales.
The ATO is available to support businesses that want to understand the new changes.
More information about registration can be found by: