The Australian Government has changed the tax law. You could be impacted if you have customers in Australia. Goods and services tax (GST) applies to sales of most goods and services consumed in Australia sold by Australia businesses.
GST now also applies:
- from 1 July 2017, to sales of imported services and digital products to Australian resident consumers. Examples of these sales include streaming or downloading of movies, music, apps, games and e-books, gambling services, and traditional services like architectural or legal services
- from 1 July 2018, to sales to consumers of imported low value goods. Imported low value goods are physical goods that have a value of A$1,000 or less (except for tobacco or alcoholic beverages). Examples include clothing, electronics and cosmetics.
Businesses that meet the registration threshold of A$75,000 in a 12 month period will need to:
- register for GST with the Australian Taxation Office (ATO)
- charge GST on taxable sales
- lodge returns to the ATO
- pay the GST to the ATO.
In this system, you charge GST at point of sale, and then pay the GST to the ATO in your GST return. This is similar to the Value Added Tax in China.
Unlike many other countries, the GST on imported low value goods will not be collected at the border. Taxes, duties or other charges can apply at the border for imports that are not low value goods.
The importer is responsible for any GST payable for imports over A$1,000 and imports of tobacco or alcoholic beverages.
This information is general guidance that summarises the new laws for you. We recommend that you:
- seek advice
- check our detailed English language guidance at ato.gov.au/AusGST.
Who charges GST
Businesses that need to register, charge and pay GST can be either:
- merchants who sell services, digital products, or low value goods
- operators of an online marketplace (for example an app or website) through which digital products, digital services or low value goods are sold by merchants
- a re-deliverer that helps get low value goods to Australia.
However, only one entity is required to charge GST on a sale. There are rules where:
- if a merchant sells low value goods, digital services or digital products through an online marketplace, the marketplace operator is generally responsible for GST instead of the merchant
- a re-deliverer is only responsible for GST if the online marketplace operator or merchant do not assist in getting the goods to Australia.
Complying with the new law
Businesses who meet the criteria will need to register and pay GST. Penalties may apply if businesses do not meet their obligations under this new law. Australia and China are both signatories to tax treaties that allow our jurisdictions to share information.
We have used third party data (such as credit card transaction data) and undertaken significant internet profiling to identify overseas businesses that we believe are affected by the new laws.
If you have not registered or are not paying GST when you are required to, we can:
- calculate the amount of unpaid GST you owe (using third party information – for example, bank information and customs data)
- apply penalties if you have not registered for GST when you should have
- apply interest to amounts you did not pay on time
- if you have not lodged a GST return with us when you should have, we can issue an assessment that requires you to pay the unpaid GST and add a 75% penalty.
You have the same rights and obligations as Australian domestic businesses. See our Taxpayers’ Charter for more information.
If you think that other businesses are not complying with their GST obligations, you can report this to the ATO
Terms we use
Consumer
A purchaser is a consumer if they are either:
- not registered for Australian GST
- registered for Australian GST but do not purchase their items for business use.
You can be sure that GST does not apply to a sale when you obtain a purchaser’s:
- Australian business number (ABN), and
- a statement that they are registered for GST.
For imported services and digital products, GST applies to sales made to Australian consumers. This means you also need to consider whether the purchaser is an Australian resident to determine whether GST applies.
For low value imported goods, there is no residency test – whether GST applies is based on whether goods are sent to Australia. This means GST can apply if a consumer outside Australia buys a gift that is sent to Australia.
More information is available in our English language guidance, which you can find at ato.gov.au/AusGST.
Low value goods
To determine if you need to charge GST, you first need to consider the customs value of the goods. GST applies to low value goods, which are goods (except for tobacco products or alcoholic beverages) that have a customs value of A$1,000 or less when the price is first agreed with the customer.
You should not charge GST on the sale of goods that:
- have a customs value over A$1,000
- are tobacco products or alcoholic beverages.
GST will apply to these goods at the border when they are imported, and the importer will pay the GST.
If multiple low value goods are sold together (for example, two goods that each have a customs value of A$600), the default rule is that you should charge GST on each item.
However, if it is clear that the goods will be shipped in one consignment to Australia valued at over A$1,000, an exception applies where you will not need to charge GST as the goods will be taxed at the border.
Determining the customs value
Usually if goods are sold in Australian dollars, the customs value is the price the goods are sold for, minus any amount included in the price for freight and insurance from place of export to Australia. If the goods are not sold in Australian dollars and it is not clear if the goods are low value goods, you will need to convert the amounts into Australian dollars.
The amount of GST you need to charge on the sale is not based on the customs value; see Calculating the GST for more information.
If you incorrectly charge GST on a sale that is not low value goods sold to a consumer, the customer may be charged twice – in which case they can seek a refund from you. You will only be able to get a refund from the ATO for GST paid if you have refunded it to the customer.
Selling goods directly to Australia
If you sell goods into Australia directly, GST applies to the sale if:
- the goods are low value goods
- you are selling them to a consumer
- you assist in getting the goods to Australia (for example, either by sending them yourself or by arranging for someone else to deliver them)
- the goods are not GST-free
- the sale meets the requirements to be a taxable sale – one of which is that you are registered or required to register for GST.
See also:
- GST-free supplies for non-residents - specific advice relating to GST-free supplies of services, digital products and low value imported goods for these new laws in English
- Introduction to GST - Chinese - general information about how GST-free supplies are treated for items sold within Australia
Selling items through an online marketplace
If you sell items that are low value goods, digital services or digital products to consumers through an online marketplace, the marketplace operator (instead of you) will generally be responsible for GST.
However, a service that only advertises your products (for example, providing a link for customers so they can buy goods from your website) is not an online marketplace for these purposes. You will be responsible for GST on these sales.
If the online marketplace is responsible for GST on your sale of goods, they will need to ensure that their tax information is included in the relevant commercial documentation that will allow transporters and customs brokers to report this in customs documents when the goods are imported. They may ask you to ensure that information (such as their GST registration number) is included on these documents.
Operating an online marketplace
You operate an online marketplace if your service allows merchants to sell low value imported goods, digital products or digital services to customers, and your service is delivered by electronic communication (such as a website, app or app store).
In most circumstances you will need to register and return GST on these sales to Australia, instead of the merchants. Do not include sales through your marketplace where the goods come from within Australia. The merchant will continue to be responsible for GST on these sales.
Re-deliverers of goods
You may need to register and charge GST as a re-deliverer if, as part of your business, you assist customers in getting goods to Australia and provide:
- an offshore mailbox service, where you provide the use of an address outside Australia to which goods are delivered, or
- a shopping service, where you purchase or assist in purchasing goods outside Australia as the agent of a recipient.
However, if a merchant or online marketplace is also involved in getting the goods to Australia, they will be responsible for GST instead of you. This means that transporters will not usually be re-deliverers under the law.
Calculating the GST
You must return GST on taxable sales if you are required to register. The Australian GST rate is 10%, so the GST will be 1/11th of the price paid by the consumer.
If the price includes fees for shipping or insurance, this is typically included in the price you charge GST on.
There are special rules to calculate the GST if you are a re-deliverer.
The amount of GST you need to charge on the sale is not based on what value is put on the customs documents. For example, if you sell a mobile phone to a consumer in Australia for A$660 and you need to register, you will need to pay GST of A$60 to the ATO in your GST return.
If you sell a mobile phone for A$1,200 to Australia, you won’t need to pay GST as it is not a low value good. The importer will pay GST at the border.
As soon are you are aware Australian GST is likely to apply to the sale of goods, Australian consumer law requires you to display a GST-inclusive price.
Registration
You must register for GST in Australia if you run a business and your GST turnover from sales that Australian GST can apply to is A$75,000 or more in a 12 month period.
This means:
- from 1 July 2017, you need to register and pay GST if your sales of services or digital products (plus any other sales GST applies to) to Australian consumers is A$75,000 or more in a 12 month period
- from 1 July 2018, you need to register and pay GST if your sales of low value imported goods to consumers that are sent to Australia (plus any other sales that GST applies to, including sales of services and digital products to Australian consumers) is A$75,000 or more in a 12 month period.
If an online marketplace operator is responsible for GST on the sale, you don’t count this towards your A$75,000 threshold. The operator of the marketplace counts the sale towards their threshold.
If you are a merchant, marketplace or re-deliverer, the following sales do not count towards your threshold:
- sales where GST would not apply because the sale is not made to a consumer (or to an Australian resident consumer, if the sale is a service or digital product)
- the sales are GST-free, and you are a non-resident whose business is outside Australia
- you sell goods that have a customs value over A$1,000 or are alcoholic beverages or tobacco products – unless you are the importer.
Types of registration
There are two ways to register for GST if you need to pay it:
1. Simplified GST
If you have no presence in Australia, the easiest way to comply is our Simplified GST system. This is an online platform that is fully secure and accessible via the ATO’s website.
Next step:
2. Standard registration
This is the standard system for domestic businesses, through which you can claim GST credits if you pay Australian GST on purchases for your business.
Being registered for GST purposes does not mean you have a permanent establishment in Australia for income tax purposes.
Next step:
Once you are registered for GST
You need to lodge GST returns and pay GST to the ATO.
You need to pay GST in Australian dollars and there are special rules when converting.
|
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 |
You also need to keep records. See our Chinese language advice on record keeping for small businesses.
For sales of low value imported goods, you also need to:
- Issue a receipt to the customer if you charge GST
The receipt must include your name, GST registration number, date of issue, a description of the goods, and the amount of GST charged on each item (or if GST is charged on all items, that the total price includes GST).
- Ensure information is included on customs documents
If you are registered for GST and you are responsible for GST on a sale (either as the merchant who sells the goods, or as an online marketplace operator or re-deliverer), you need to ensure that certain tax information is included in the customs documents for those goods.
This requirement applies even if the purchaser is not a consumer and for this reason you do not charge GST.
You do this by:
- including the relevant information on the commercial documents, and
- requesting that this information is included by the customs broker or transporter who completes the customs documents on behalf of the importer.
If you are an electronic distribution platform operator, you will need to ensure that the merchant does this on your behalf.
The tax information you must make sure to include is:
- your GST registration number
- if the purchaser is not a consumer, their Australian business number
- whether GST was charged on each of the goods.
Help and information
More information about GST is available in Chinese:
- An introduction to Goods and Services Tax - this is a general overview of how GST operates within Australia
- Taxpayers’ Charter.
Contact us
Send an email to AustraliaGST@ato.gov.au
Call us on +61 2 6216 1111 between 8:00am to 5:00pm, Australian Eastern Standard Time (AEST) Monday to Friday, except for national public holidays. Please ask the operator to connect you to 1300 146 094 with code 118#.
For a free interpreting service, phone +61 3 9268 8332 and ask to be connected to 1300 146 094.
Chinese language summary of the new GST law for Chinese markets.