Non-resident businesses making online sales to Australia

Your GST obligations

 

If you're a non-resident supplier of imported services, digital products or low value imported goods, you have goods and services tax (GST) obligations to meet.

Once you are registered for GST, you need to:

• work out if you are selling to an Australian GST registered business
• include GST in the price of  
  • sales of low value imported goods to consumers (except for tobacco products or alcoholic beverages) with a customs value of A$1,000 or less
  • sales of imported services and digital products made to Australian consumers
• lodge your GST returns or business activity statements (BAS) and pay in Australian dollars
• keep good records, including giving the correct information to customers and on customs documents.

For more information about importing into Australia, see Non-resident businesses and GST and GST on imported services, digital products and low value imported goods. If you don't know the meaning of a particular term, see GST definitions.

Sales to a business or consumer in Australia

You need to determine if:

• you're selling to either  
  • a GST-registered business
  • someone else in Australia
• GST doesn't apply to sales made to Australian GST-registered businesses that are buying for business use.

For more information, see how to charge GST on imported services, digital products and low value imported goods.

GST-inclusive pricing

The GST rate in Australia is 10%, meaning GST is 1/11th of the amount you charge for sales. However, if you are a redeliverer, special rules apply.

You must display a GST-inclusive price as soon as you're aware Australian GST is likely to apply to a sale. This is required by Australian consumer law, see Australian Competition and Consumer CommissionExternal Link.

If you're not sure if Australian GST applies, you can display a message advising additional taxes may apply. As soon as it's clear that GST applies, you must show the GST-inclusive price. These requirements are the same regardless of the currency.

Converting currency to Australian dollars

Low value imported goods

When goods are sold in a currency other than Australian dollars and you're unsure if the customs value of the goods will be a A$1,000 or less, you need to convert the amount into Australian dollars.

When converting currency to determine the customs value of the goods, you must use the same exchange rate option each time.

You can use any of these exchange rate options:

• the Australian Border Force exchange ratesExternal Link
• the Reserve Bank of AustraliaExternal Link (RBA) rate, or a rate published by another central bank (such as the European Central Bank)
• an exchange rate that's consistently higher than the RBA rate against the Australian dollar provided by a foreign exchange organisation that gives exchange rates publicly
• a rate published by a foreign exchange organisation (for example, a commercial bank).

Lodging your BAS or GST return

Use Australian dollars when completing your BAS or GST return. You must also pay your GST amount to us in Australian dollars. To do this, you need to make the conversion to Australian dollars on a particular day, known as your conversion day.

You can choose from 4 options when converting your sales and GST into Australian dollars:

• option 1, when you account for GST on a non-cash basis – your conversion day is the earlier of the  
  • day on which any of the payment is received for a sale
  • transaction date or invoice date (whichever you have chosen)
• option 2, when you account for GST on a cash basis – your conversion day is either the  
  • transaction date
  • invoice date
  • day on which any of the payment is received for the supply of the goods
• option 3, if you are registered for standard GST and make sales of imported services, digital products and low value imported goods – your conversion day is either
  • the final day in the tax period for sales of imported services, digital products and low value imported goods
  • option 1 or 2 if you have a GST liability for other sales
• option 4, if you are registered for simplified GST – your conversion day is either
  • the final day in the tax period
  • option 1 or 2.

The exchange rates are:

• the Reserve Bank of Australia (RBA) rate
• a rate published by a foreign exchange organisation
• an agreed rate (between you and your GST-registered customer that applies for sales made under an agreement for the period of that agreement. If you are associates, the rate must reflect a rate that would be agreed if you were dealing at arm's length)
• for sales of low value goods, the same rate you used to work out the customs value of the goods.

For more information and rulings foreign currency, see:

• Foreign exchange rates
• F2018L00725External Link Goods and Services Tax: Foreign Currency (Customs Value of Low Value Goods) Determination 2018
• GSTR 2001/2 Goods and Services Tax: foreign exchange conversions
• F2017L00845 FOREX 2018/1 Goods and Services Tax: Foreign Currency Conversion Determination 2018.

Adjustments and fixing GST mistakes

Make sure you correct mistakes and make an adjustment, on your BAS or GST return if:

• you've incorrectly charged GST  
  • on a sale of goods that aren't low value imported goods
  • to a customer that isn't a consumer
  • to a customer that isn’t an Australian consumer
• you provide a refund on goods or digital products returned by a customer
• a digital supply is cancelled (for example, a cancelled subscription or withdrawal from an online course)
• you provide your customer a refund of GST that was collected again at the border on imported goods.

If any of the above circumstances apply, you're only entitled to a GST refund from us, in your BAS or GST return, after reimbursing your customer the GST.

Adjustments for excess GST are known as credit errors. You can correct a credit error on a later activity statement, after you've reimbursed your customer the excess GST. The correction of a credit error must be made within the time limit. When reporting credit errors on an activity statement, see correcting GST errors.

Issuing tax invoices or receipts

If you are registered for:

• standard GST, you can issue tax invoices or issue receipts showing your Australian business number (ABN)
• simplified GST, you issue receipts but not tax invoices as you don’t have an ABN.

If your customer is an Australian GST-registered business purchasing for business purposes, you don’t charge GST or issue tax invoices.

For sales of imported services, digital products and low value imported goods you are not required to issue a tax invoice or adjustment note to your customers. If you choose to issue a tax invoice (which you can only do if you have an ABN), it must have all of the required information.

There are certain requirements when issuing tax invoices or receipts. They are:

• if the total price of a transaction is over A$1,000, to include the purchaser's name (this could occur if you sell multiple goods)
• to include your ABN or ATO reference number (ARN)
• to state if GST is included in the price.

When you charge GST on a sale of low value imported goods, you must issue a receipt to the customer. This can be in an electronic form, such as an email confirmation or a receipt.

The receipt must contain the following information:

• your name
• your GST registration number, which is either ARN or ABN
• the date of issue
• a description of what you supplied, including the quantity (if applicable) and the price
• the amount of GST payable
• information that identifies whether GST was charged on the goods
• if you charged GST on all the goods, you can include the GST-inclusive price and state that this price includes GST (alternatively, you can include the GST for each item)
• if GST was not charged on some of the goods, the receipt must show which goods were subject to GST.

If the total price of the sale is over A$1,000, you also need to include the name of the customer. This could occur if you sell multiple low value goods and have not applied the exception for multiple goods that total over A$1,000.

Keeping records

You are legally required to keep records of all transactions relating to your Australian tax affairs for 5 years.

Requirements for customs documents for low value imported goods

You must ensure tax information is included on your customs documents, including self-assessed clearances or import declarations, when registered for GST and you are:

• a merchant who sells low value imported goods
• an electronic distribution platform operator  
  • treated as the supplier of low value imported goods
  • ensuring merchants do this on your behalf
• a redeliverer treated as the supplier of low value imported goods.

You do this by:

• including information on commercial documents
• requesting this information be included by the customs broker or transporter completing the customs documents on behalf of the importer.

This information is required when you:

• charge GST on a sale of low value imported goods
• don't charge GST because the purchaser isn't a consumer – instead they're a GST-registered business with an ABN
• don't charge GST because you applied the exception for multiple goods totalling over A$1,000.

The tax information you must include is:

• your GST registration number, which is either your ARN or ABN (referred to as your Vendor ID on import documents)
• the customer's ABN, if you have it
• whether GST was charged on the goods
• receipts with the information needed to complete customs documents when GST applies to the sale.

Penalties may apply if you fail to take reasonable steps to ensure that the relevant tax information is included on customs documents.

If you are a transporter or customs broker, you need to understand how GST on low value imported goods affects you.

For more information about the requirements for customs documents, see Law Companion Ruling LCR 2018/1 GST on low value imported goods.