International VAT Guides – Australia
GST rates in Australia
How much is GST in Australia?
The Australia GST system mirrors a highly developed, modern, well-established regime. A few different types of legislation define the framework of GST in Australia. The three most important and impactful types of legislation are the following:
- The New Tax System (Goods and Services Tax) Act 1999 provides the administrative framework for the Goods and Services Tax (GST) law;
- New Tax System(Goods and Services Tax) Regulations, and;
- Taxation Administration Act.
The Goods and Services Act is the country’s central source of GST.
In addition to the GST Act, the Australian Taxation Office(ATO) has prepared many practical guides and instructions for domestic and non-resident taxable persons.
Business entities that make taxable supplies over the mandated threshold or wish to charge GST on their sales should register for GST.
| Australia GST Rate | Rate Type | Coverage and imposition |
| 10% | Standard Rate | The general VAT rate applies to all supplies of goods and services that aren’t zero-rated or exempt. |
| 0% | Zero-rate | Exports of goods and services, most foods, some education services, and international transport. |
| Tax-exempt | Tax-exempt | Long-term rent of residential property, certain financial services. |
GST threshold in Australia
The GST Australia Act defines the requirements and conditions for mandatory GST registrations. When an economic operator reaches the threshold, it should register in due time to avoid any penalty for late registration.
The interested economic operator can also register voluntarily, e.g., when it intends to claim input tax credits for its business purchases.
The GST threshold in Australia is quite similar for both local and non-resident businesses.
The mandate for GST registration is based on gross sales minus permitted deductions in any 12 months.
VAT registration threshold for resident businesses: AUD 75,000.
VAT registration threshold for non-resident businesses: AUD 75,000.
VAT registration threshold for foreign providers of digital services: AUD 75,000.
GST Taxable Activities in Australia
Types of taxable activities that trigger mandatory GST registration:
- Supply of goods and services for consideration;
- Exports;
- Imports of goods and services;
- Overseas sales of low-value goods to customers in Australia;
- Provision of digital services to customers in Australia.
Tax Representative in Australia
Non-resident digital services providers are not obligated to acquire the services of third-party service providers for GST registration and filing.
Tax registration
Standard Registration
Domestic or foreign taxable persons with a place of business or permanent establishment in the country have different registration options. The standard registration for GST could be handled online, following the special online service, via telephone, or email.
Simplified tax registration
Non-resident providers of imported services or digital products could register online using a simplified GST registration template.
GST on Electronically Supplied Services in Australia
Digital Services
Non-resident imported or digital service providers can register online using a simplified registration procedure. This registration has numerous advantages for the provider; however, it eliminates the possibility of claiming input tax credits.
After registration, non-resident suppliers of digital services should charge GST for B2C supplies. Regarding B2B supplies, the reverse charge mechanism should be used when the recipient is a GST-registered local business.
How much is GST in Australia for Electronically Supplied Services?
The GST rate Australia for most digital goods and services is 10%.
Taxable Digital Services in Australia
The following types of digital services trigger mandatory VAT registration of non-resident providers:
- Audio and video streaming services;
- SaaS services;
- E-books and publications;
- Intermediation between third parties offering goods or services and those seeking them;
- Travel arranging services.
Marketplace and Digital Platform Operators Rules
The non-resident GST-registered digital platform operator is responsible for collecting and reporting GST for the supplies of imported services or digital products on behalf of the non-resident digital service providers. In cases where the non-resident digital platform provider isn’t GST registered but should be, the liability is triggered, even if it hasn’t been registered before.
When domestic vendors make the underlying supplies of digital services or products, the non-resident platform operator could also be responsible for collecting and reporting GST. However, this GST responsibility isn’t automatically transferred to the platform operator, as it is when the underlying provider is a foreign service provider.
This responsibility starts with a service agreement between the platform operator and the resident seller.
A non-resident digital platform operator’s registration threshold and conditions are the same as those for a non-resident remote service provider. When the platform operator receives its GST registration certificate, it should collect and remit GST for all underlying supplies.
Invoicing Rules
A GST-registered non-resident supplier of remote services isn’t obligated to issue a tax invoice to its customers.
The minimum requirements of the invoice are the following:
General information:
- Date of invoice issuance;
- Date and time of supply.
Seller information:
- Company name;
- Full address (head office);
- Billing address if different from company address;
- GST number.
Customer information:
- Name;
- Full address;
- GST number (if applicable).
Fiscal Information:
- Tax amount for each type of goods or services supplied;
- Net value per tax rate;
- Distinct line of gross value per tax rate or tax-exempt supply;
- Type of the transaction by reference to the categories indicated in the VAT Act;
- Total tax amount;
- Invoice Total tax exclusive;
- The rate of any discount;
- Total invoice amount.
Foreign Currency Invoice in Australia
In most cases, issuing an invoice in a foreign currency is permitted. However, submitting a GST declaration should be processed exclusively in local currency.
GST Return in Australia
Standard Return
Local businesses and foreign businesses with permanent establishment in the country are obligated to follow the procedure for issuance of the standard return in electronic format.
Simplified return
Non-resident providers of digital services that have registered through a simplified form should submit a simplified return.
GST Simplified Return
| GST Return Name | Simplified Return |
| Filling frequency | Quarterly |
| Online Filling | Mandatory |
| Annual Return | No |
| Filing deadline | Until the 28th day of the month following the reporting period |
| Payment deadline | Until the 28th day of the month following the reporting period |
| Payment currency | AUD |
| Language | English |
| Local VAT acronym | GST |
Penalties for late reporting and omitted declarations
Late GST return filing, late GST payment, and late registration are situations in which taxable persons would most likely have the obligation to pay a penalty and/or interest for not being compliant in the prescribed timeframe.
Fines and penalties according to the GST Australia Act and the Tax Administration Act:
PENALTIES FOR LATE PAYMENT AND FILING:
The Australian Taxation Office (ATO) doesn’t take late payments and filings lightly. Responsible economic operators should know late filings or payments could attract penalties and interest.
Failure to lodge on time penalty: If the economic operator doesn’t submit its GST return before the deadline, the ATO may charge them one penalty unit every 28 days up to 5 penalty units. With the latest amendments, the penalty unit stands today at AUD 33.0. That means the maximum penalty for failing to lodge is $1,650.
The infringing economic operator could be required to pay AUD 330 every 28 days up to a maximum of AUD 1,650.
PENALTIES FOR LATE REGISTRATION:
Penalties may be imposed if an entity fails to apply to register for GST when required by the GST Act, or if it is registered, to apply to cancel a GST registration as needed.
Failure to comply with its registration obligations entitles an entity to an administrative penalty of 20 penalty units, the current value of which is AUD 330.
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