Australia
GST Standard rate
The standard VAT rate in Australia in 2024 is 10%.
GST Reduced rate
–
GST-free products and services
Most basic foods, some education courses, and some medical, health, and care items and services are exempt from GST.
Effective since 1 July 2018.
According to Tax and Superannuation Laws Amendment (2016 Measures No1) Act 2016, electronic/digital services provided by non-resident providers fall under 10% GST.
VAT Standard rate
The standard VAT rate in Australia in 2024 is 10%
VAT Reduced rate
There is no reduced rate established.
VAT calculation peculiarity
VAT= Total revenue * 10/110.
Threshold
The foreign entity must register for GST in case its turnover from sales, that are connected with Australia, is up to or more than the registration turnover threshold of A$75,000 (approx. €45,000). “Connected” means goods that are supplied within Australia or services linked to goods in Australia, or services carried out in Australia.
Low-value goods
Goods with a customs value of A$1,000 (approx. €615) or less (referred to as low-value goods) supplied from overseas to Australian customers may include GST that will apply at the point of sale. However, not all sales will include GST. If a company sells less than A$75,000 of low-value goods to consumers in Australia (or other supplies subject to GST) per year, it will not be required to charge GST. However, if the company sells A$75,000 or more of low-value goods to customers in Australia (or other supplies subject to GST) per year, such as through a website or call center, then it is necessary to register for and pay GST on those sales.
GST on goods with a value of more than A$1,000 continues to be collected as part of normal border clearance processes in Australia.
Online Marketplaces
Online marketplace traders and redelivery service suppliers are treated as suppliers and face the same requirements to register for, collect and pay GST. For example, Amazon requires to calculate, collect and pay 10% GST on low-value goods sold on amazon.com.au by retailers that are shipped from outside Australia to customers in Australia. But if the company sells via Amazon FBA – it takes the responsibility for its GST obligations when selling to consumers in Australia using the FBA service. And if its turnover is more than A$75,000 AU per annum, then it is necessary to register an account for GST on sales of chargeable products.
Tax representative
There are no representative obligations in Australia.
GST registration procedure
Companies that are required to register for Australian GST, can choose either simplified GST registration or standard GST registration.
Simplified GST registration has fewer administrative burdens than standard GST registration. However, the company can’t claim any GST credits under this registration. In both cases, the company will be required to complete and submit a VAT registration form via the website of the Australian Taxation Office.
The supporting documentation is as follows:
- Certificate of incorporation;
- Trade register extract;
- VAT certificate;
- If the company is appointing a local tax consultant or fiscal agent, then a Letter of Authority or Power of Attorney is.
*All the docs should be translated into English language.
GST payment and filing date
GST returns and payments are due on a monthly and quarterly basis depending on the amount of turnover:
- Monthly – on the 21st of the end of the GST period if turnover is more than A$20 million per year
- Quarterly – on the 28th of the end of the GST period if turnover is less than A$20 million per year.
Companies can also keep track of deadlines at the LOVAT portal.
Threshold
Registration for GST is only necessary where annual taxable supplies to Australia are in excess of AUS$ 75,000.
Pieces of evidence
Examples of information that can assist in confirming if the purchaser is an Australian resident include:
- The purchasers;
- Billing or mailing address;
- Bank details, including the location of the bank;
- 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;
- Their country selection;
- Tracking/ geolocation software;
- IP (internet protocol) address;
- Place of establishment or incorporation of the purchaser (for a business purchaser);
- Representations and assurances were given by the purchaser;
- The origin of correspondence;
- Locations, such as a Wi-Fi spot, where the physical presence of the purchaser is needed.
E-services list
Australian goods and services tax (GST) applies to sales made by suppliers outside Australia to Australian consumers purchasing imported:
- Services;
- Digital services;
- Digital products.
Imported services and digital products are also known as inbound intangible consumer supplies. This term is used in a number of our guidance and ruling documents.
Examples of imported services and digital products include:
- Supplies of digital content such as e-books, movies, TV shows, music, and online newspaper subscriptions;
- Online supplies of games, apps, software, and software maintenance;
- Webinars or distance learning courses;
- Insurance services;
- Gambling services;
- Online dating services;
- Booking services for events or places within Australia (such as hotel accommodations or sports events);
- Website design or publishing services;
- Professional association services (ie membership fees);
- Legal, accounting, architectural, or consultancy services.
This law ensures these types of supplies to Australian consumers are subject to GST regardless of whether they are supplied by an overseas-based merchant or an Australian merchant.
Registration procedure
Australia offers two types of tax registration for non-Australian businesses: simplified and standard.
Simplified GST
The simplified version of tax registration is designed specifically for foreign businesses that want to sell in Australia. The system allows you to register, report and pay Australian GST online. But, actually, the Simplified GST doesn’t allow you to claim input tax credits. To register with Simplified GST, the merchant has to set up an AUSid account and then log into ATO’s online services for non-residents.
Standard GST system
The Standard GST system is the same tax registration that Australian-based businesses use. It allows them to claim input tax credits.
VAT returns filling date
Australian returns are filed on a quarterly basis.
Penalties
If a non-resident supplier has not registered for GST or is not remitting GST on its sales to Australian consumers, tax authorities will:
- Register the non-resident supplier;
- Assess the amount of GST payable and apply a penalty.
If the merchant has not contacted tax authorities after all notices they can:
- Calculate business liability (using third-party information – for example, bank information) from the date of commencement of the law (1 July 2017);
- Apply the general interest charge (GIC) to outstanding amounts from earlier periods;
- Raise and issue a default assessment with an additional 75% administrative penalty;
- Work with the tax authority in the merchant’s country to collect the debt.
Keeping records
Non-resident supplier must keep records of all transactions made to Australian consumers for five years.
VAT on physical goods
From 1st July 2018, under new rules, Australian GST will apply to foreign supplies of low value goods (LVIGs) imported into Australia by customers who are private individuals. This means that if you are a non-resident seller that makes sales or facilitates the delivery of LVIGs to Australian consumers, you will have to start collecting the GST on your supplies of LVIGs.
LVIGs are physical goods with a customs value of AUD 1,000 or less (excluding tobacco, tobacco products or alcoholic drinks). Goods with a customs value over AUD 1,000 are subject to import GST at the border.