• About GST

    GST is a tax of 10% on most goods, services and other items sold or consumed in Australia.

    GST is included in prices paid by the consumer for goods and services. The seller collects the GST and forwards it to the ATO.

    It may be referred to as Value Added Tax (VAT) or consumption tax in other countries.

    What is the Australian GST rate?

    The GST rate in Australia is 10%. If your business is registered or required to be registered for GST, 1/11th of the amount you charge for your goods or services is the GST amount that you must send to the Australian Taxation Office (ATO).

    Is the GST rate the same for all goods and services?

    Yes, the GST rate is the same for all goods and services that are subject to GST. GST generally applies to most goods and services, however some supplies are not subject to GST (also known as zero-rated supplies in other countries).

    See also:

    Is there a GST registration threshold (amount before I need to register)?

    Yes, the registration threshold is currently A$75,000 (Australian dollars) for sales to Australian consumers in a 12 month period.

    Will I need to issue tax invoices to my customers?

    If you sell services or digital products to Australian consumers from outside Australia, and you are registered under the simplified registration system, you don't need to provide a tax invoice or adjustment note to your customers.

    This may be different if you are registered under the full GST registration system in Australia, see Issuing tax invoices.

    What records do I need to keep for GST?

    You need to keep records that substantiate your supplies to Australian customers.

    See also:

    How long do I keep records?

    Keep your GST records for 5 years.

    What about ongoing arrangements before 1 July 2017?

    Yes, some rules apply for ongoing contracts entered into before 1 July 2017. For example, if you sell a subscription that covers periods before and after 1 July 2017, only the portion of the subscription from 1 July 2017 is taxable. You should report and pay the GST on the taxable portion of the subscription.

    Example

    A1 Magazines is an overseas-based company that sells digital magazine subscriptions.

    It sells a 12-month subscription to Scott, who resides in Australia. The subscription runs from 1 April 2017 to 31 March 2018 with monthly payments.

    From 1 July 2017, A1 Magazines has to charge and pay GST to the Australian Tax Office. They do not have to charge or pay GST on portion of the subscription that applied from 1 April 2017 to 30 June.

    End of example

    Can I use an agent to register and account for Australian GST?

    Yes, you can use an agent to register and account for Australian GST.

    See also:

    GST on services and digital products

    Are sales of services and digital products to Australian consumers taxable?

    Non-resident sellers make a taxable sale if they are registered or required to be registered for GST and:

    • make the sale for payment
    • make the sale in the course or furtherance of a business (enterprise) they carry on
    • the sale is made to an Australian consumer
    • the supply is not GST free or input taxed.

    What is an Australian consumer?

    An Australian consumer is an Australian resident who is not registered for Australian GST.

    You can determine whether your customer is an Australian consumer using evidence gathered from your normal business systems and processes.

    Identifying Australian consumers

    How do I identify an Australian consumer?

    Examples to confirm if your customer is an Australian resident include:

    • your customer's billing address
    • your customer's mailing address
    • your customer's bank details, including the location of the bank
    • your customer's credit card details including any descriptor that shows the location of the credit card issuer
    • location data from third party payment intermediaries
    • mobile/cell phone SIM country code
    • telephone country code
    • your customer's country selection
    • tracking/ geolocation software
    • IP (international protocol) address
    • place of establishment of your customer (for business customers)
    • representations and assurances given by your customer
    • the origin of correspondence, and
    • locations, such as a Wi-Fi spot, where the physical presence of your customer is needed.

    What if I use an automated business system?

    If you make supplies using fully automated systems, we accept it is difficult to collect additional information beyond those systems.

    We will accept that your supplies are made to recipients that are not Australian consumers if both apply:

    • you make automated supplies of services, rights or digital products
    • your usual business systems provide at least two pieces of non-contradictory evidence which support that the recipient is not an Australian consumer.

    As evidence, you can use the recipient's details if any of the following are outside Australia:

    • billing address
    • mailing address
    • bank details including branch of bank
    • credit card issuer (bank)
    • web-based country selection
    • location detected through tracking/ geolocation software
    • IP address
    • mobile phone number or landline country code.

    You can also use other commercially relevant information which is relevant to establishing a person’s residency.

    However, if your usual business systems also collect an equal number of pieces of evidence which support a conclusion that the recipient satisfies the residency element, we will accept that your supplies are made to a recipient that is not an Australian consumer if the recipient’s credit card details show that the card issuer (bank) is outside of Australia.

    Is my customer an Australian business registered for GST?

    You can confirm your customer is a GST-registered Australian business by asking for their Australian business number (ABN) and a statement that they are registered for Australian GST.

    Electronic distribution platform (EDP) as supplier

    An EDP is a service that allows entities to make supplies available to end-users delivered by electronic communication. Examples of services that may be an EDP are a website, internet portal, gateway, store or marketplace.

    Broadly, the operator of an EDP is treated as having made supplies of digital products and services that are made through the EDP.

    Is my business an electronic distribution platform (EDP)?

    Generally, a business is an EDP if all of the following apply:

    • it allows entities to make supplies available to end-users
    • it is delivered by means of electronic communication
    • the supplies are to be made by means of electronic communication.

    A service is not an EDP solely because it is either:

    • a carriage service (such as operated by internet service providers and telecommunication companies)
    • a service providing one or more of the following
      • access to a payment system
      • access to processing payments
      • ‘face-value’ vouchers.
       

    As an operator of an EDP am I always liable to pay GST?

    Yes, in most cases if the supply is made through an EDP, the EDP operator (instead of the supplier) must collect GST.

    If an inbound intangible consumer supply is made through an EDP, the EDP operator (instead of the supplier) is treated as the supplier and is liable for GST on the inbound intangible consumer supply.

    If an Australian business utilises an EDP to make supplies of digital products to Australian consumers it may enter into a written agreement with the EDP. A written agreement would shift the GST liability for the digital supplies (that are not inbound intangible consumer supplies) made by the Australian supplier through the EDP to the operator of the EDP.

    When is the operator of an EDP not liable to pay GST?

    The operator of the EDP is not liable to pay the GST if it does not control any of the key elements of the supply.

    The supplier (instead of the EDP operator) is responsible for GST on the supply if all the following apply:

    • a document issues to the recipient that identifies both the supply and the supplier (not the EDP operator) as the supplier of the supply
    • the supplier and the operator have agreed in writing that the supplier is the entity responsible for paying GST for the supply, or for a class of supplies that includes the supply concerned
    • the operator of the EDP does not
      • authorise the charge to the recipient for the supply
      • authorise the delivery of the supply, and
      • set the terms and conditions under which the supply is made.
       

    See also:

    Who pays the GST if my business provides goods or services through an EDP?

    Generally, if the supply is made through an EDP, the EDP operator (instead of the supplier) must pay GST.

    Exceptions may apply. For example, if an agreement exists between the supplier and the EDP or if multiple EDPs are involved in making a supply.

    See also:

    Registration

    Do I need to register for GST?

    From 1 July 2017 you need to be registered if you:

    • are an international supplier of digital products and other services to Australian consumers
    • meet the registration turnover threshold of A$75,000 and make these supplies.

    These supplies includes digital products such as streaming or downloading of movies, music, apps, games and e-books as well as services such as architectural or legal services.

    Do I meet the GST registration threshold?

    You reach the GST turnover threshold if either your:

    • 'current GST turnover' (your turnover for the current month and the previous 11 months) totals $75,000 or more ($150,000 or more for non-profit organisations)
    • 'projected GST turnover' (your total turnover for the current month and the next 11 months) is likely to be $75,000 or more ($150,000 or more for non-profit organisations).

    Your GST turnover is your gross business income (not your profit), excluding any:

    • GST you included in sales to your customers
    • sales that are not for payment
    • sales by non-residents to an Australian business that has provided an ABN and declared that they are registered for GST
    • sales not connected with an enterprise that you run
    • input-taxed sales you make
    • sales not connected with Australia.

    In working out your projected GST turnover, include amounts you receive for the sale of a business asset (such as the sale of a capital asset) or for any sale you made, or are likely to make, solely as a consequence of ceasing or substantially and permanently reducing the size of your business.

    If your current GST turnover reaches or is more than the GST turnover threshold but you satisfy the ATO that your projected GST turnover will be below the threshold, you do not have to register for GST.

    See also:

    What is the simplified GST system for non-residents?

    You or your agent can use our Simplified GST System for non-residents to electronically register, report and pay GST.

    See also:

    What are my obligations under the simplified GST system?

    You can choose to register in the simplified GST system registration entity if you:

    • sell services or digital products to Australian consumers, and
    • are based outside Australia.

    Under the simplified system you:

    • cannot claim input tax credits
    • are not entitled to an Australian business number
    • must account for GST on a quarterly basis (every 3 months).

    Note: You can't use this system if you sell services or digital products through an enterprise you run in Australia.

    What is a limited registration entity?

    A non-resident business that registers in the simplified GST system for non-residents is called a limited registration entity.

    What is the standard GST registration system?

    The standard GST registration system is the existing registration system used by the majority of GST registrants. In this system you:

    • can get an Australian business number (ABN)
    • can claim input tax credits
    • are not limited to quarterly accounting periods
    • use activity statements to report GST.

    How do I register for the standard GST system?

    You can currently register using the standard GST registration system by completing the following steps:

    1. Apply for an Australian business number (ABN)External Link
    2. Register for an AUSkeyExternal Link
    3. Register for GST

    If I register for the GST system for non-residents, can I change to the standard GST registration system?

    Yes, however you cannot be registered in both systems at the same time. To change from the simplified system to the full system, you must revoke your election to be a limited registration entity and then apply for an ABN and full GST registration.

    GST returns

    When do I lodge and pay under the simplified GST system for non-residents?

    You lodge your GST returns quarterly.

    Lodgment and payment dates under the simplified system

    Quarter

    Payment and lodgment date

    September quarter

    1 July to 30 September

    28 October

    December quarter

    1 October to 31 December

    28 February

    March quarter

    1 January to 31 March

    28 April

    June quarter

    1 April to 30 June

    28 July

    When do I lodge under the standard GST registration system?

    If you are registered using the full GST registration system, see the other options for reporting and paying GST.

    How do I correct or adjust GST paid in a previous period in the Simplified GST System for non-residents?

    If you make a mistake or you need to adjust your GST payable you can do that on a subsequent return. You do not need to go back and amend a previous return. Simply adjust the amounts on your next GST return. You will need to keep records that show your account recalculations.

    Payment

    How do I pay GST?

    You can pay GST by credit card or bank transfer via SWIFT.

    Do I need to use Australian dollars?

    Yes, you must report and pay in Australian dollars.

    What conversion rate do I use?

    Use the rate from:

    • a foreign exchange organisation
    • the Reserve Bank of Australia rate, or
    • the rate agreed between you and your customer.

    When do I convert the rate?

    You can convert amounts on the earlier of either the:

    • day any of the payment is received for the sale
    • transaction date/the invoice date (whichever you have chosen).

    You can also convert amounts on the final day of your tax period.

    If your conversion day is the final day of your tax period, you must use that conversion day for a period of no less than 12 months.

    What if I make a mistake in the simplified GST system for non-residents?

    If you make a mistake, you can correct this on your next GST return. If you report an amount of credit on your return, you can apply this to your future liabilities. If you need a refund of your credit, you need to:

    • complete an application form
    • provide full proof of your identity.
      Last modified: 23 Jun 2017QC 51339