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  • What to do as a non-resident business importing services, digital products and low value imported goods

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

    Make sure you read this along with Non-resident businesses and GST and GST on imported services, digital products and low value imported goods into Australia to find out the rules that apply more generally.

    On this page

    GST definitions will help if you don't know what terms mean.

    What you have to do

    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.

    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.

    See How to charge GST.

    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.

    Example: Displaying the GST-inclusive price

    Yukiko runs a business in the USA, selling paper knitting patterns worldwide including Australia.

    She displays the price of each pattern with the statement ‘additional taxes may apply’.

    She receives an order from Australia. She finds out the purchaser is in Australia and isn't a GST-registered business, so she updates the price to include GST. This is done at the checkout once the purchaser has entered their delivery address.

    End of example

    Converting currency to Australian dollars

    In this section

    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 first 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, for those sales of imported services, digital products and low value imported goods as well as option 1 or 2, you can also use the final day in the tax period for these sales on which GST is payable for that period
      • This option is restricted to sales of imported services, digital products and low value imported goods
      • If you have a GST liability for other sales you will need to use option 1 or 2
       
    • option 4, if you are registered for simplified GST, as well as option 1 or 2 you can also use the final day in the tax period.

    The exchange rates are:

    • the Reserve Bank of Australia (RBA) rate
    • a rate published by a foreign exchange organisation
    • an agreed rate (meaning a particular rate agreed between you and your GST-registered customer which only applies for sales made under an agreement and for the period of that agreement. If you and the GST-registered customer are associates, the agreed rate must reflect the rate agreed to by parties 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.

    See also:

    Adjustments and fixing GST mistakes

    Make sure you correct mistakes. Examples of where you may need to make an adjustment (standard GST registration) or a correction (simplified GST registration) are if:

    • you've incorrectly charged GST  
    • 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)
    • GST is 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 for the GST.

    If you are using simplified GST registration, once you reimburse your customer you can reduce the amount of GST payable in your next GST return.

    If you are using standard GST registration, see Fixing BAS mistakes or making adjustments.

    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 five 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:

    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.

    See also LCR 2018/1 GST on low value imported goods for more information about the requirements for customs documents.

    Last modified: 08 Dec 2021QC 52556