Australian GST – New Tax Rules 2018
New tax rules will come into force for the sale of low-value goods to consumers on July 1st, 2018 in Australia.
If you’re an existing merchant or marketplace selling into Australia or looking to expand into this market you may want to get up to speed with the latest tax regulation down-under.
Here is an overview of Australian GST and what the new rules mean for you and your business.
Goods and Services Tax in Australia
GST is the Goods and Services Tax in Australia, equivalent to VAT (Value Added Tax) which is most commonly used in Europe.
You may need to register and charge GST when the following condition applies:
- You’re the merchant who sells the goods
- You’re an operator of an electronic distribution platform (EDP) such as an online marketplace through which merchants sell their goods
- A re-deliver that helps bring goods to Australia
Bear in mind that only one entity is required to charge the VAT
There is an order to who is required to pay the GST which is as follows:
- If an EDP operator is responsible for adding GST on the sale, the merchant will not be
- If an EDP operator or Merchant is responsible on a sale, the re-deliverer will not.
Regardless of whether the seller is based in Australia or overseas the above is applicable.
Australian GST applies to the sale of low-value goods that are imported by a consumer
Low-value goods are physical goods sold for $1000 Australian dollars or less but exclude the following
- Alcoholic beverages
- Tobacco Products
When a seller hits 75,000 Australian Dollars or more in a 12-month period – GST registration is required.
When you need to report and pay GST in Australia
Monthly – GST turnover of $20 million or more
Quarterly – GST turnover is less than $20 million
Annually – GST registered but under the $75,000 threshold
As a GST registered business, you need to issue tax invoices to your customers, when adding GST.
Merchants selling through an electronic distribution platform EDP
Unless you are responsible for adding the GST currently, under the new rules THE EDP WILL RESPONSIBLE FOR ADDING GST
An example of an EDP is a marketplace such as Amazon, eBay or Catch or a seller’s own website.
Please also see the exceptions and definitions for online marketplaces.
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