Goods and services tax, which is known as GST, is a tax based in Australia representing 10% on most goods; services and other items sold or consumed in Australia.
GST is applied to almost all Australian businesses so it can highly affect your business.
If any business is registered for GST, it needs to collect extra money (one-eleventh of the sale price) from customers and should be paid to the Australian taxation office (ATO) when it is due.
When do you need to register for GST?
All companies that are selling goods and services should register for GST if the business has a GST turnover of A$75,000 or more.
A business owner, has responsibility to register for GST if his turnover exceeds the A$75,000 threshold or is likely to exceed it.
The ATO advises that if anyone open a new business and expect it to earn A$75,000 or more in its first year of operation, he should register for GST.
The GST turnover is the business’s gross income, not business’s profit.
Let’s have an example :
If a company run an online clothing store and sell A$95,000 worth of clothes, it has to register for GST because the GST turnover is over the A$75,000 threshold. This rule still applies, even if the business’s profit is A$50,000.
If the company becomes aware that its GST turnover will exceed the A$75,000, it should register for it within 21 days.
It is better to register for GST now before exceeding the threshold to avoid any sanction.
The duty of overseas businesses selling to Australian consumers
Any company outside of Australia which sells its goods and services to Australian consumers and make over A$75,000 should register for GST.
From 1 July 2018, the GST will apply also to the sale of low value imported goods to consumers in Australia. Low value imported goods are goods with a customs value of A$1,000 or less, except for alcoholic beverages and tobacco products.
How do you register for GST?
You can contact us so to have more information about this service.