Recently, the Australian government has introduced a new GST legislation on the imported low value goods. The new legislation will be effective from 1 July 2018 and it will affect thousands of online platform overseas sellers whose annual GST turnover is over $75,000, such as Ebay, Amazon sellers etc. These overseas sellers under the new legislation will be required to registered GST and reporting their GST on a monthly, quarterly or annually return.
GST is a type of tax enforced by Australian government on the provision of goods and services. Once the business registers GST, it has to charge GST on the goods and services it provides which is 10% of the original price unless the goods or service is a GST free or input taxed item. Every month, quarter or year, the business needs to remit the collected GST on sales to Australian Taxation Office; in the meantime, it will also get credit of the GST charged on the consumptions. For those online platform overseas sellers, once they register GST, they will be requested to do exactly the same as described above except they choose simplified GST registration which cannot claim GST credit at all.
The new legislation doesn’t affect the old rule that GST paid at border on the imported goods over $1000. So that means the business doesn’t need to charge GST on the invoice when a bundle of goods valued over $1000 imported through custom and GST paid at border.
The government haven’t given explicit measure how to scrutinize the compliance of the overseas seller. However, some discussion is on stopping the IP address of the online seller if their GST is not complied, so they cannot continue to sell on the online platform to the Australian consumers. Some others argue that the online platform or other operators can charge and collect the GST on behalf of overseas sellers and remit to the Australian Taxation Office. No matter how, since the new legislation has been kicked in, overseas sellers had better to prepare for registering and complying the government’s request as earlier as possible to avoid the penalty notice from the Australian Taxation Office and business damage caused by blocking of IP address.
Need Help?
If you are unsure whether your overseas business must register for GST, or whether simplified GST registration suits the way you sell online, Pitt Martin Group can help you review and document your Australian sales, weigh up registration options, reporting and credits, and prepare for the GST obligations that will apply to you.
As Sydney tax accountants, we assist overseas sellers with GST registration, return lodgement and practical compliance advice.
Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group, Sydney tax accountants, is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.
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