GST obligations for international businesses selling to Australia
International businesses with sales connected to Australia may be required to register for and pay GST if their turnover exceeds certain thresholds. These rules are particularly relevant as cross-border digital commerce continues to grow.
The GST obligations apply to:
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electronic distribution platform (EDP) operators that allow merchants to sell services, digital products or low value goods to Australian customers
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merchants who sell services, digital products and or low value goods to consumers in Australia
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redeliverers that bring low value goods into Australia on behalf of Australian consumers
What are low value goods
For GST purposes, low value goods are generally goods with a customs value of AUD $1,000 or less. The customs value is broadly the price of the goods, excluding freight and insurance from the place of export.
GST does not apply to certain categories of supplies, including:
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basic or essential food and beverage items
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certain medical services, medical aids and appliances
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certain education courses and educational materials
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certain cars and car parts supplied to eligible people
When GST registration is required
If you are a relevant merchant, EDP operator or redeliverer, and your sales connected to Australia total AUD $75,000 or more over a 12-month period, you are required to register for GST in Australia.
Once registered, you must:
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charge GST on taxable sales to Australian consumers by including it in the price
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report the GST collected to the ATO
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remit the GST to the ATO in Australian dollars
Reporting and paying GST
GST collected from Australian sales must be reported to the ATO through a GST return, usually as part of a business activity statement (BAS). The GST payable must then be paid to the ATO in Australian dollars.
Simplified GST registration for non-residents
For most non-resident merchants, EDPs and redeliverers, simplified GST registration will be the easiest way to meet Australian GST obligations.
Under simplified registration:
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an ABN is not required
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GST credits cannot be claimed, including credits for taxable importations
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registration, lodgment and payment are done through ATO online services for non-residents
Once registered, the non-resident business will receive a unique 12-digit Australian Reference Number (ARN). This ARN is used as the identifier in dealings with the ATO and may also be required on invoices or customs documentation.
Non-resident businesses using simplified registration must:
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lodge GST returns quarterly
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pay the full GST amount owing, along with any card payment fees, bank handling fees and exchange fees
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make payments using SWIFT transfer or a credit or debit card
Standard GST registration
Some non-resident businesses will not be eligible for simplified registration and may need to apply for standard GST registration. This applies where:
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the business wants to issue Australian tax invoices
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the business wants to claim GST credits
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other registration requirements are triggered
Standard registration comes with additional obligations, including:
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applying for an ABN
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meeting proof of identity requirements
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potentially engaging an Australian registered tax agent
Under standard registration, non-resident businesses generally cannot lodge electronically from outside Australia, which can increase compliance costs.
Key points to keep in mind
As global trade and digital services continue to expand, GST obligations for non-resident businesses are becoming increasingly important. Businesses selling into Australia should closely monitor their turnover to ensure they register for GST when required.
The ATO also notes that once registered for GST, businesses are expected to remain registered for at least 12 months.
If you operate internationally and sell to Australian customers, obtaining advice early can help ensure you meet your GST obligations and avoid unexpected compliance issues.
Speak to one of our accountants if you have any questions about the changes in tax for 2023.
