Income tax and source of income
If you export goods or services and you are an Australian resident entity, your export income is generally subject to income tax. This is because your assessable income includes your world-wide income.
If you derive income from another country and pay tax in that country, you may be entitled to a foreign income tax offset against your Australian income tax.
Foreign income your company earns may be exempt from Australian tax if your company derives this income by carrying on business at or through a permanent establishment in the other country.
The source of income is generally the place where the:
- contract is entered into, in the case of goods
- services are performed, in the case of services.
If you are exporting goods by selling them to a foreign resident entity on a free on board (FOB) basis in Australia, the place of contract is likely to be in Australia.
If you export to a country that has a tax treaty with Australia, the treaty may have special rules to help you determine the source of the income.
For more information, see Doing business overseas – what you need to know
How GST applies
GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia and on most imports of goods. Generally, once you are registered for GST you will include GST in the price of supplies to your customers and claim credits for the GST included in the price of your business purchases.
Exports of goods, services and other exports
Exported goods are GST-free if they are exported from Australia within 60 days of one of the following, whichever occurs first:
- the supplier receives any payment for the goods
- the supplier issues an invoice for the goods.
There are specific rules that determine if the sale of things other than goods or real property for consumption outside Australia, are GST-free or excluded from being treated GST-free.
For more information about export of goods, services and other exports, see:
If you or your business exports goods and services overseas, find out how Australian tax applies to you.