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In an increasingly globalised marketplace, foreign online sellers have expanded their reach to customers around the world, including Australia. However, when operating in a new country, it is important to understand and comply with the relevant regulations and tax requirements.
We will explore the key considerations for foreign online sellers regarding Goods and Sales Tax (GST) registration, import charges, and the necessary documentation for doing business in Australia.
Goods and Sales Tax (GST) Registration:
One of the primary considerations for foreign online sellers in Australia is GST registration. If your actual or projected sales in Australia exceed $75,000 AUD in a financial year, you are required to register for GST. Until you reach this threshold, there is no obligation to be registered. It's important to note that once you cross the threshold, you only need to register from that point onward. In other words, you do not have to pay GST on the first $75,000 if you are not registered.
Additional Requirements and Double Taxation Agreements:
To determine if there are any additional requirements beyond GST registration, it is essential to check if a double taxation agreement exists between your country and Australia. These agreements aim to prevent individuals and companies from being taxed twice on the same income in both countries.
GST on Imports:
When shipping products into Australia, Australian Customs charges GST on imports which must be paid by the importer. In the case of foreign online sellers, this typically involves the courier company handling distribution forwarding the GST amount to you. However, if you are registered with an Australian Business Number (ABN) and GST, you can claim this GST as a credit.
Ongoing Requirements
Once registered for GST, you will have an obligation to lodge a Business Activity Statement (BAS) every quarter. You will report the Australian gross sales, GST on Sales, and GST on Expenses including GST on Import.
The due date for the BAS is generally 28 days after the end of the quarter.
Registration Process and Required Information:
To register for an ABN and GST in Australia, you may consider seeking assistance from professionals such as Dolman Bateman for their services. During the application process, you will need to provide the following information:
- Official name of the entity
- Type of entity (company, LLC, etc.)
- ARN/ABRN (if applicable)
- Business address
- Postal address (if different)
- Commencement date of registration for GST (when sales/costs started within Australia, if not yet, this will be the same day as the application). This can be backdated.
As an international applicant, we will also need identification documents to send as part of the registration process.
Statement of Business Activity in Australia:
This statement should include:
- Physical address of the business
- Brief description of the business activity, including sales and expenses in Australia
- Brief description of the products or services offered
- Signature of the authorized representative of the business
Identity Documents:
To complete the registration process, you will need to submit identification documents for each significant member of the company. The documents should be in English and certified by a notary public.
*Please note, a JP or Attorney certification is not sufficient for this purpose.
Primary Documents:
- Birth Certificate, or
- Passport
Secondary Documents
- National Photo ID, or
- Foreign Government ID, or
- Marriage Certificate, or
- Driver License
In the case of a name change, additional documentation such as a marriage certificate, deed poll, or change of name certificate is necessary.
It is essential to ensure that the address on both identity documents is consistent and written in English. If the address is not in English, a translated copy must be provided, which needs to be notarised by an Australian Embassy/Consulate.
This blog has been prepared for the purposes of general information and guidance only. It should not be used for specific advice or used for formulating decisions under any circumstances. If you would like specific advice about your own personal circumstances, please feel free to contact us on 02 9411 5422. We can help make sure the right method is used to give you the maximum possible tax deduction associated with any of these methods.
