Doing business in Australia? Here’s what you need to know about Australia’s Goods and Services Tax (GST), including how to register for GST, exemptions, taxes on imported goods, and how to lodge a GST return.
Guide to Australia’s GST for new immigrants
Relocating to Australia can be an incredible adventure, but here at Remitly we understand there’s more to it than just beach days and shrimp on the barbie. As a new resident, at some point you’ll have to deal with the not-so-fun but oh-so-necessary parts of life like getting a driver’s licence, opening a local bank account, and sorting out your taxes.
Understanding your tax obligations may not be the most exciting part of living in Australia, but it helps ensure a smooth experience abroad. To help you stay compliant, we’ve created this Remitly guide to Australia’s GST including key information for businesses, individuals, importers, residents, and non-residents.
Overview of Australia’s GST system
GST is a 10% tax applied to most retail sales of goods, services, and items sold or consumed in Australia. However, some items are exempt from GST, like most basic foods, certain educational and healthcare products and services, cars for disabled people, exports, and transactions between GST-registered businesses.
For a comprehensive overview of GST, check out the Australian Taxation Office (ATO) website.
How GST affects new immigrants
As a newcomer to Australia, you’ve likely already encountered GST as a consumer. That new mobile you bought? GST was included in the purchase price—just like with your surfboard and sofa. If you look closely at your receipt you’ll see the tax breakdown.
If you’re looking to start a business in Australia, take on some freelance gigs, or import goods, you may need to register for GST. However, the requirements depend on the value of your transactions and whether or not you’re a resident. It may seem complicated, but we’re here to set you on the right path.
Understanding the Australian taxation system
In Australia, residents pay taxes to the government, which funds essential services like education, healthcare, infrastructure, and community services like schools, hospitals, parks, motorways, and defence. In general, Australian residents pay tax on their worldwide income, whereas non-residents pay tax only on income earned from business activities in or with Australia.
Key components of the tax system
One of the most important taxes in Australia is income tax, which applies to earnings from:
- Employment
- Rental income
- Australian pensions and annuities
- Capital gains on Australian assets
If you’re new to Australia, keep in mind that the financial year runs from July 1 to June 30 of the following year.
For a step-by-step guide on filing taxes, check out our Remitly guide on How to File Taxes in Australia.
Role of GST in Australia’s tax system
GST is a tax on goods and services, similar to VAT or sales tax in other countries. It is a broad-based 10% tax that the end consumer is responsible for paying. As a business, you have to charge your retail customers for GST (equivalent to 1/11th of the sale price) and then pay that amount to the Australian Taxation Office (ATO) when it’s due.
Registering for Australia’s GST
Learning about the tax system in a new country can feel overwhelming, but registering for (and paying) GST is straightforward.
Who needs to register?
You are required to register for GST if your enterprise meets or exceeds the GST turnover threshold, which is currently:
- $75,000 AUD or more for businesses
- $150,000 AUD or more for non-profit organisations
Important: Certain businesses have to register for GST, even if their revenue is below the threshold, including:
- Taxi and limousine services (including ride-shares like Uber or DiDi)
- Businesses claiming fuel tax credits
How to register for GST
Not sure where to start with GST registration? Here’s a step-by-step overview:
- Step 1: Ensure you have the proper authorisation to work in Australia.
- Step 2: Get your Tax File Number (TFN), a unique identifier that will be yours for life and allows you to contribute to the Australian tax system.
- Step 3: Register for an Australian Business Number (ABN), an 11-digit number that identifies your business or organisation.
- Step 4: Once you have an ABN, you can register for GST online, by phone, through a registered tax agent, or via mail.
- Step 5: Once registered, you’ll need to lodge a Business Activity Statement (BAS) to report and pay your GST.
If you’re required to register for GST, you must do so within 21 days to avoid penalties.
GST exemptions (non-taxable importations)
Not all goods or services are subject to GST. However, since most things tax-related are complex, it’s a good idea to consult a professional to ensure your business stays compliant.
Categories of GST exemptions
GST is generally applied to imported goods unless they qualify for a specific customs duty concession or GST exemption. Exempt items include:
- Certain foods and beverages
- Certain healthcare products
- Cars for disabled people
- Precious metals
- Money
Implications for businesses and individuals
Whether you’re the end consumer or the importer, it’s critical to correctly identify which category your goods fall under. Failure to do so may result in penalties, or conversely, cause you to pay GST on goods that should be exempt.
Non-residents and GST
Non-residents are responsible for GST on sales connected to Australia, including goods, services, digital products, and real property, provided they meet a certain threshold and according to certain exceptions. You can find more detailed information on these requirements here.
Clarifying non-resident obligations
As a non-resident, you have to register for GST if your business generates $75,000 AUD or more in revenue from sales connected to Australia (for non-profit organisations, the threshold is $150,000 AUD).
However, if all your Australian-connected sales are made via an online marketplace or digital distribution platform, you may not need to register for GST.
As a non-resident business, you can choose between simplified or standard GST registration. Simplified registration is quicker and easier with fewer reporting requirements, ideal for businesses with straightforward transactions. Standard registration involves more detailed reporting and compliance, suited for larger or more complex businesses.
Factors influencing registration decisions
While registering for GST is usually a compliance requirement, some businesses may decide to voluntarily register. This might be to claim specific tax credits, or because they anticipate needing to register in the near future.
Lodging GST returns
Depending on the size of your business and other factors, your GST reporting cycle may be monthly, quarterly or annually. You can find all the detailed information you need to lodge your GST return on the ATO website.
Steps to lodge GST returns
- If you are registered for GST, you will automatically receive a Business Activity Statement (BAS) based on your business’s reporting period. Your BAS will indicate the deadline for lodging and paying your taxes.
- There are several online payment options, including myGov and ATO online services.
Compliance and deadlines
It’s your responsibility to lodge and pay on time, even if you are using an intermediary tax agent. Penalties for Failure to Lodge (FTL) vary, but it’s better to avoid them all together. Interest will be charged on any overdue amounts. If you’re struggling to pay your taxes, contact the ATO before the due date to discuss your situation and set up a payment plan.
GST on imported goods
Goods imported into Australia are generally subject to GST unless they qualify for an exemption. You can find detailed guidelines here, but in general, goods valued over $1,000 AUD are subject to GST.
GST rules for imported goods under $1,000 AUD
Imported goods valued below $1,000 AUD are exempt from customs duties and GST under the Low Value Imported Goods (LVIG) rule. However, if your business turnover exceeds the $75,000 AUD threshold, you will still have to pay GST on these goods.
GST on high-value imports
Goods valued at $1,000 AUD or more are subject to both import and customs duties as well as GST. However, if your business is registered for GST, you can claim a credit for these taxes.
FAQs
Do non-residents need to register for GST?
It depends. If you’re doing business in Australia or have Australian-sourced income, you may need to register for GST based on your sales volume. If your GST turnover is $75,000 AUD or more, you are required to pay GST (unless you are selling goods or providing services that are exempt).
However, if all of your Australian-connected sales are made through an online marketplace or electronic distribution platform, you may not need to register for GST.
Do foreigners pay GST in Australia?
Yes, if you’re a foreign resident running a business (or doing freelance work) in Australia with a GST turnover greater than $75,000 AUD, or if you have a non-profit enterprise with a turnover greater than $150,000 AUD, you will need to pay GST. This also applies if you’re running a transportation or rideshare business, as you have to register for GST regardless of your income.
If you’re a foreigner importing goods valued at $1,000 AUD or greater, you will likely need to pay GST.
If you’re visiting Australia as a tourist, you can claim a GST refund on certain goods you take out of the country with you on a plane or ship.
Do I need to charge GST if I earn under $75,000 AUD?
If your annual turnover is under the GST threshold of $75,000 AUD, registration for GST is voluntary. However, you must register for GST if you provide taxi or limousine services (including rideshares) or if you want to claim fuel tax credits for your business.
Do I pay GST on imported goods under $1,000 AUD?
No, imported goods valued under $1,000 AUD are typically exempt from GST. You can find detailed guidelines about GST for imported goods here.