Australian GST on imported goods under AUD1,000
Sales of low value imported goods under AUD1,000 into Australia have been subject to GST since 1 July 2018. With the increasing popularity of online sales, particularly from foreign companies into Australia, it is important to ensure your business is complying with its Australian GST obligations.
Below are some answers to the most common questions around these rules.
What are low value goods?
Any product that is sold from outside Australia at AUD1,000 or less and delivered into Australia to the consumer may be subject to GST.
Do the low-value supply GST rules apply to your business?
If you are a foreign business making sales directly or indirectly into Australia to consumers (ie business to consumer (B2C) transactions), these GST rules may apply to your business, even if you don’t have a business presence in Australia. These rules do not apply to business to business (B2B) transactions.
The rules also apply to sales made through an electronic distribution platform and by re-deliverers.
These rules do not apply to goods above AUD1,000 and those goods will continue to be taxed by customs at the Australian border.
Is your business required to be registered for GST?
If your business makes sales of AUD75,000 or more to Australian consumers in any 12-month period, your business will be required to register for GST. There is a simplified GST registration process for foreign entities that are impacted by these rules but under this method, the entity cannot claim back any GST credits. Alternatively, there is also a standard GST registration process which allows GST credits to be claimed back.
What is Australia’s rate of GST?
Australia’s GST rate is 10% of the GST-exclusive price (or 1/11 of the GST inclusive price). If your business is subject to the GST rules, you may need to consider increasing the total price of the goods to cover the GST.
How do I comply with the Australian GST rules?
Your business will first need to register for GST.
Your business will then need to report and remit GST on sales made into Australia to the Australian Taxation Office (ATO). Generally, where an entity’s GST annual turnover is less than AUD20 million, it will need to report and pay GST on a quarterly basis via the GST return known as a ‘business activity statement’ (BAS). A quarterly BAS is generally due on the 28 day of the next month after the end of the quarter (ie a September quarter BAS is due on 28 October). Entities with over AUD20 million turnover will need to report and remit GST on a monthly basis.
How can we help?
If you are unsure of whether your business is subject to GST in Australia, or require further information or assistance, please feel free to contact us.