ato logo
Search Suggestion:

GST transactions with mainland Australia

How Norfolk Island businesses work out their GST obligations when dealing with businesses on the Australian mainland.

Last updated 14 September 2022

Transactions on Norfolk Island

GST and other indirect taxes don’t apply to Norfolk Island. However, Norfolk Island businesses may need to consider the GST implications when dealing with businesses on the Australian mainland.

The Norfolk Island GST ceased on 1 July 2016 and the Australian GST doesn’t apply to Norfolk Island residents. Therefore, Norfolk Island businesses shouldn’t charge GST, or advertise prices including GST, or issue invoices including GST for transactions on Norfolk Island.

Transactions with the Australian mainland

Norfolk Island businesses are only required to register for GST when they make supplies connected to the Australian mainland and have a GST turnover over $75,000 in any 12-month period. GST turnover is your gross business income (before tax) that excludes sales on Norfolk Island.

When it comes to dealing with the Australian mainland, Norfolk Island businesses can:

  • purchase goods GST-free from Australia (by negotiation with the mainland seller)
  • claim a GST refund (via the tourist refund scheme)
  • register for GST and claim the GST credits on their business activity statement.

If the goods or services you purchase include GST, and you do not receive a refund of the GST, you can use the total price paid to work out your allowable tax deductions at the end of the income year.

GST-free sales

Australian mainland suppliers can sell goods to residents of Norfolk Island GST-free where they meet the export requirements.

This involves a bit of paperwork and it’s important to arrange this with the supplier upfront before you complete the transaction.

If the supplier is unfamiliar with the rules, you may need to refer them to the information on our website about:

Tourist refund scheme

You may also be able to get a GST refund under the tourist refund scheme (TRS).

The Department of Home Affairs and its operational arm, Australian Border Force, administer the TRSExternal Link.

Registering for GST

As a business, you have the option of voluntarily registering for GST and claiming a credit for the GST included in the price, if:

  • the goods or services are for your business, not personal use
  • you have a valid tax invoice from the supplier (if the price is more than $82.50 including GST)
  • the purchase doesn't relate to making input-taxed supplies.

You must register for GST if your GST turnover is $75,000 per year or more (or if your not-for-profit organisation's turnover is $150,000 per year or more).

Voluntary GST registration

Voluntarily registering for GST means you will:

  • need to apply for an ABN and GST, or add GST to your current ABN registration
  • prepare and lodge a business activity statement (BAS) either monthly, quarterly or annually depending on how you choose to report
  • keep records of the valid tax invoices from your Australian suppliers showing the GST you've paid
  • include 10% GST in the price of taxable sales you make to the Australian mainland
  • stay registered for GST for a minimum of 12 months.

Claiming GST credits

You can only claim GST credits for GST included in your purchases provided all of the following criteria are satisfied:

  • you were required to be registered for GST, or you voluntarily register for GST
  • the goods or services are for your business, not personal use
  • you have a valid tax invoice from the supplier, and
  • the 4-year time limit for claiming a GST credit for the purchase has not ended.

To claim GST credits, you will need to register your business for GST and backdate your GST registration to the day you commenced your business. However, backdating of your GST registration is limited to 4 years.

If you choose to backdate your GST registration to claim GST credits, you will also need to report GST on any taxable sales you made.

Charging GST

As a GST registered Norfolk Island business you will only need to charge GST on taxable sales you make to the Australian mainland. Sales to customers on Norfolk Island are not subject to Australian GST.

Completing your BAS

If your business is registered for GST, you must complete the GST section of the BAS. Only sales that are connected with the Australian mainland should be included.

Input-taxed supplies

Input-taxed sales are sales of goods and services that don't include GST in the price. You can't claim GST credits for the GST included in the price of your 'inputs'.

The most common input-taxed sales are financial supplies (such as lending money or the provision of credit for a fee) and selling or renting out residential premises.

BAS lodgment

If you voluntarily register for GST you can choose to lodge your BAS monthly, quarterly or annually, known as tax periods.

We will send you a BAS for the first tax period after you register, depending on the tax period you choose.

To claim GST credits (and pay any GST on taxable sales you have made) you complete and lodge your BAS as instructed by the due date.

Contact us

If you have questions about GST and dealing with Australian mainland suppliers, you can contact us by: