• GST on imported services and digital products

    The Australian goods and services tax (GST) applies to international sales of services and digital products provided to Australian consumers. This means overseas businesses will be required to pay GST on these sales from 1 July 2017.

    Find out about:

    If you don’t understand a term we use, see GST definitions.

    Services and digital products covered by the measure

    The new law applies very broadly to sales of anything except goods or real property imported by Australian consumers.

    If you are an Australian business registered for GST, then GST will not apply to the services or digital products you import for use in your business. If you are not registered for GST, GST will apply to these purchases.

    The supplier will not charge GST if you:

    • provide them with your Australian business number (ABN), and
    • state that you are registered for GST.

    If you are purchasing goods for your personal use only, don't provide your ABN. Penalties can apply if you provide false information to a supplier.

    Examples of digital products include downloaded movies, games and electronic books. Examples of services include architectural, legal or educational services.

    If you sell through an electronic distribution platform (EDP), for example an app store, the platform operator is responsible for registering, reporting and paying the GST.

    See also:

    Registering for Australian GST

    If you sell imported services or digital products to Australian consumers and you meet the registration turnover threshold, you need to register for GST with us. You will meet the registration turnover threshold if your sales to Australian consumers in a 12 month period are A$75,000 or more. Once registered, you need to report and pay GST to the ATO on sales made from 1 July 2017.

    How to register

    A simplified system for non-residents is available for you to electronically register, lodge and pay the GST. Under the simplified registration system, you:

    • will register electronically with minimal proof of identity
    • will lodge and pay GST quarterly
    • do not need to provide a tax invoice or adjustment note to your customers
    • are not able to claim tax credits.

    See also:

    What you need to do under the new Australian GST law

    The GST rate in Australia is 10%. Therefore it is 1/11th of the amount you charge for sales of digital products or services to Australian consumers will be the GST amount that you must pay.

    Australian consumers

    An Australian consumer is an Australian resident who is not registered for Australian GST, or, if registered, does not purchase the imported service or digital product for business purposes.

    To work out if you are dealing with an Australian consumer you need to:

    • use information captured in your business systems or obtain information to reasonably identify Australian residents
    • exclude Australian businesses by obtaining an Australian business number (ABN) and a statement that they are GST registered.

    Supplies that start before 1 July 2017

    A transitional rule applies to periodic or progressive supplies that start before 1 July 2017 and continue after 1 July 2017. Supplies made progressively over a period of time are treated as being supplied continuously over that period.

    If you make a supply before 1 July 2017 and the period of the supply extends beyond this, the portion after 1 July 2017 may be subject to GST. The GST is payable in the first tax period after 1 July 2017.

    This commonly occurs when selling subscription services to consumers. For example, if you sold a 12-month subscription in September 2016, the portion of the sale from 1 July 2017 is taxable, so you will need to pay GST on the portion of the subscription for July and August 2017.

    Registration – standard and simplified

    Standard GST registration

    When we say standard GST registration, we mean the current GST system in Australia.

    For information on the current GST system in Australia, see Australian GST registration for non-residents.

    Simplified GST registration

    You can choose to access a simplified GST registration for non-residents. You can do this if you make inbound intangible consumer sales.

    You can choose this option even if you are currently registered for GST.

    An inbound intangible consumer sale is a sale of anything other than goods or real property (for example, digital products and other services) that is made to an Australian consumer and is not either:

    • wholly done in Australia
    • made through an enterprise you run in Australia.

    How to register

    You will be able to register electronically with minimal proof of identity.

    If you have any questions, email us at AustraliaGST@ato.gov.au and we'll let you know when more information is available.

    Under the simplified GST registration you:

    • do not need to provide a tax invoice or adjustment note to your customers
    • are not able to claim tax credits.

    See also:

    Returns

    You must lodge your GST returns quarterly if you are registered through the simplified GST registration system for non-residents.

    Calculate and report GST quarterly

    As a quarterly payer, you calculate and report at the GST labels in your BAS and pay your actual GST amounts quarterly.

    The due date for lodging and paying is displayed on your business activity statement (BAS). If the due date is on a weekend or public holiday, you can lodge your form and pay on the next business day.

    As a limited registration entity you must lodge and pay electronically.

    Quarterly reporting due dates

    Quarter

    Due date

    1 - July, August and September

    28 October

    2 - October, November and December

    28 February

    3 - January, February and March

    28 April

    4 - April, May and June

    28 July

    Payments

    As a non-resident you can pay your business activity statement (BAS) GST amount by credit card or SWIFT.

    You must make payment by the due date to avoid late lodgment penalties.

    The easiest way to pay is with credit card.

    See also:

    Transfer from an overseas bank account

    You can make a payment from an overseas financial institution (bank) using SWIFT. The payment must be in Australian dollars.

    See also:

    Record keeping

    You will need to keep records under Australian tax law.

    See also:

    More information

    • Refer to GST on imported services and digital products - FAQ
    • You can also
      • email questions to AustraliaGST@ato.gov.au
      • phone us on +61 2 6216 1111. Our business hours are 8:00am to 5:00pm, Australian Eastern Standard Time (AEST) or Australian Eastern Daylight Saving Time (AEDST) Monday to Friday, except for national public holidays. Please ask the operator to connect you to 1300 146 094, then wait until you hear instructions to enter '118#'. After you enter the code, you will be transferred to an officer who can help you. For a free interpreting service, you can phone +61 3 9268 8332 and ask to be connected to 1300 146 094.
       
    Last modified: 23 Jun 2017QC 49335