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Goods and Services Tax

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GST, is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.

Goods and services tax, often known as GST, is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. GST applies to most Australian businesses and it's highly likely that your business will be affected by the tax.

If your business is registered for GST, you'll have to collect some extra money (one-eleventh of the sale price) from your customers and pay it to the Australian Taxation Office (ATO) when it is due.

Do I need to register for GST?

You must register for GST if:

  • your business has a GST turnover of $75,000 or more
  • your non-profit organisation has a turnover of $150,000 per year or more
  • you provide taxi travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover. This rule applies to both taxi owner drivers and people who just rent a taxi.

As a business owner, it's your responsibility to register for GST if your turnover exceeds the $75,000 threshold or is likely to exceed it. The ATO advises that if you've just started a new business and expect it to earn $75,000 or more in its first year of operation, you should register for GST.

GST turnover is your business's gross income, not your business's profit.

If your business doesn't fit into one of the above categories, you don't have to register for GST.

Head to the ATO website to work out your GST turnover.

Example

If you run an online clothing store and you sell $80,000 worth of clothes, you'd have to register for GST because your GST turnover is over the $75,000 threshold. This rule still applies, even if you only get to keep $40,000.

 

Overseas businesses selling to Australian consumers

You must register for GST if you're an overseas business importing services and digital products to Australian consumers and make over A$75,000.

If you're a merchant selling imported services or digital products or an electronic distribution platform operator facilitating these sales, you should consider registering for GST. This includes:

  • digital products such as streaming or downloading of movies, apps, games and e-books
  • imported services such as architectural or legal services.

From 1 July 2018, you'll need to register for GST if you're an overseas business making over A$75,000 and sell low value imported goods to Australian consumers. This will affect goods valued at A$1000 or less on items like:

  • clothing
  • cosmetics
  • books
  • electric appliances.

You can find more about Tax on retail sales of goods and services into Australia on the ATO website.

When do I need to register?

If you haven't registered for GST, and you become aware that your GST turnover will exceed the $75,000 per year threshold, you will have to register for GST within 21 days.

It's a good idea to check each month to ensure you're not likely to go over the over the limit. Keeping an eye on your GST turnover is important so you can register if necessary.

If your GST turnover is below the $75,000, registering for GST is optional.

You may choose to register if your GST turnover is below the $75,000 threshold, however this means that once registered, regardless of your turnover, you must include GST in your fees and claim GST credits for your business purchases.

How do I register for GST?

  1. You need an Australian Business Number (ABN) to register for GST. Your ABN is part of the GST system and your ABN will be used as your GST registration number.
    If you don't have an ABN and are registering for one, you can use the same online form to apply for tax registrations during the application process. If you anticipate that your GST turnover will be over $75 000, make sure you register for GST when completing your ABN application.
  2. Go to the Business registration service Beta. You will be able to register for GST and other taxes on the same form.
  3. If you are unable to register online, you can call the ATO or register for GST through a registered tax agent.

If you're registered for GST, you're entitled to claim input tax credits for the GST paid on items you've bought for business use. If you're not registered, you can't claim input tax credits.

 

This is general information only and should not be relied upon as financial product advice. You should seek independent advice before taking any product or service.

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