The Federal Parliament in Australia has passed a law that will extend GST (goods and services tax) to low value physical goods imported by consumers beginning July 1, 2018. Businesses that meet the threshold will need to take action now to review their business systems and ensure that they are able to comply.
As of July 1, 2018, international businesses will be required to collect 10% GST on low value goods they sell to consumers in Australia, if their sales to Australia equal A$75,000 or more in any 12 month period. (NOTE: The existing processes to collect GST on imports above $1,000 at the border are unchanged.)
More information and full detail on this change, including how businesses can register, report and pay GST, is available at www.ato.gov.au/ausgst.
What this means for overseas businesses
- Businesses will be required to register if their GST turnover in Australia is A$75,000 or more in a 12 month period.
- These businesses must charge and collect GST on the low value goods they sell to consumers in Australia, and they must pay the GST collected to the Australian Taxation Office.
- Business will also need to let consumers know that GST has been applied by including GST in the final price quoted or advertised.
Compliance - getting ready for July 1, 2018
- Businesses selling to Australia should start taking these steps now to understand how the GST changes apply to them.
- Review your sales to Australia; if you think you need to register, consider: (1) Do you need to change your pricing to include GST?; (2) Do you need to make any changes to your receipts?
- Merchants selling through an online platform should speak with the operator of the platform about their respective obligations. Re-deliverers should also consider their positions.
- Consider consulting your tax professional.
Visit the Australian Taxation Office website at www.ato.gov.au/ausgst. This website includes:
- law companion guidelines containing information about how the law works
- specific information regarding when a platform operator or re-deliverer will be responsible for GST
- practical information covering issues such as how to convert amounts into Australian dollars to determine if goods are in fact low value goods and to pay GST
You can also email AustraliaGST@ato.gov.au with any questions.