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  • Making compliance happen

    As of 1 July 2018 Australian goods and services tax (GST) will apply to sales of low value goods sold to consumers in Australia. Businesses that meet the A$75,000 registration threshold will need to register for GST, charge GST on relevant sales and remit the GST to us by lodging returns.

    We will take action against businesses who do not meet their GST obligations.

    This page outlines our approach to compliance, and how your behaviour will affect the type of action you can expect from us.

    On this page:

    Our expectations of you

    We expect that you will:

    • comply with your obligations under the law
    • contact us as soon as possible if you have difficulty in complying.

    What you can expect of us

    We will:

    • treat you fairly, reasonably and consistently
    • consider your circumstances
    • work with you to find solutions to issues you are having.

    Businesses that do the right thing

    Businesses that do the right thing should not be commercially disadvantaged by their competitors who choose not to comply.

    We take action against businesses that do not meet their Australian GST obligations so that those that do the right thing are not disadvantaged.

    Businesses that try to do the right thing

    We’re here to support you, however we expect you to take reasonable steps to comply. If you still find that you are having difficulty complying, contact us and we will work with you to help you.

    Businesses that don't do the right thing

    Serious consequences, such as interest, penalties and potential prosecution can apply if you:

    • deliberately fail to register for GST when you need to
    • intentionally fail to report, or consistently under-report, your tax obligations
    • conspire with others to evade or avoid tax obligations
    • intentionally do not meet your tax obligations.

    Consequences for non-compliance

    The compliance treatments we use vary according to the type of behaviour you exhibit. We group business behaviours into categories and apply an appropriate approach to each of those categories.

    If you choose not to comply with the law, the Commissioner of Taxation can take actions including:

    • registering you for GST
    • imposing an additional 75% administrative penalty, which then becomes legally payable
    • intercepting funds from Australia that are destined for you
    • registering the debt in a court in your country
    • requesting the taxation authority in your country to recover the debt on our behalf.

    Our approach to compliance

    The following table outlines our general approach to compliance

    Compliance category

    Your behaviour

    Our action

    Fully compliant – Willing to do the right thing

    You have:

    • registered for GST as required
    • made necessary changes to your business systems
    • collected GST as required
    • reported and paid GST collected by the due date
    • made an honest mistake.
     

    We will not contact you unless we believe you have made a mistake.

    From 1 July 2018 to 30 June 2019, where you have made a mistake, we will:

    • ask you to correct it
    • not impose any penalties.

    From 1 July 2019, where you have made a mistake, we will:

    • ask you to correct it
    • consider your circumstances and level of co-operation before applying penalties.
     

    Mostly compliant – Try to comply but don't always succeed

    You have:

    • registered for GST as required
    • made a genuine attempt to collect, pay and report GST as required, but have difficulty with any or all of these
    • contacted us about your situation and worked with us to resolve it.
     

    We will not contact you unless we believe you have made a mistake.

    From 1 July 2018 to 30 June 2019, where you have made a mistake, we will:

    • ask you to correct it
    • not impose any penalties.

    From 1 July 2019, where you have made a mistake, we will:

    • ask you to correct it
    • consider your circumstances and level of co-operation before applying penalties.
     

    Partly compliant – Don't want to comply

    You have:

    • registered for GST as required
    • not collected GST as required
    • not reported the GST you collected
    • not paid us the GST collected.
     

    As of 1 July 2018 we will:

    • calculate your liability and issue an assessment
    • impose an additional 75% administrative penalty
    • take recovery action for the debt.
     

    Not compliant – Have decided not to comply

    You have taken no action to comply with your obligations.

    As of 1 July 2018 we will:

    • register you for GST
    • calculate your liability and issue an assessment
    • impose an additional 75% administrative penalty – higher penalties can apply if you are a significant global entity
    • take recovery action for the debt.
     

    See also:

    How we identify non-compliance

    We use a number of information sources to find non-compliant businesses including, but not limited to:

    • financial data tracking – to follow the flow of funds from purchasers to suppliers overseas
    • customs data giving details of imports into Australia
    • information from other countries that we obtain under arrangements to share information
    • online investigations to identify websites and businesses involved in supplying goods to consumers in Australia
    • information from individuals or businesses who report non-compliance to us
    • information provided by businesses when they report and pay the GST they have collected.

    We use data matching processes on this information to find potential situations where obligations under the law have not been met.

    We also consider and investigate any information provided to us anonymously.

    See also:

    Your rights and obligations

    Although your business is based offshore, you have the same rights and obligations as an Australian domestic business. For more information see the taxpayers' charter.

    See also:

    Consumers who provide ABNs to avoid paying GST

    Consumers who represent themselves as a GST-registered business by giving you an ABN that does not belong to them are committing an offence and significant penalties can apply to them.

    Last modified: 03 Apr 2018QC 54951