Australia's GST changes will apply to foreign importers and Australian consumers from July 2018
Changes to Australian GST rules mean that foreign importers will be treated the same as Australian retailers from 1 July 2018 as the AUD $1,000 GST threshold is set to be removed.
"Currently, foreign businesses importing and selling goods to Australian consumers are not required to charge GST unless the value of goods sold exceeds AUD $1,000. From 1 July 2018, sales of any value by a foreign business will be required to charge GST."
Jamie Towers, Tax Partner, Hanrick Curran
Australia’s Goods and Services Tax (GST - equivalent of VAT) rules on the import of goods into Australia will change from 1st July 2018 as Australia continues to modernize its tax rules to make them more applicable to new business models being used in the digital economy. The changes will expand Australia's GST base.
Australia’s GST rate is 10% and a business is required to register for GST if its actual or anticipated sales over the next 12 months exceed $AUD 75,000.
The current GST rules for foreign importers
At the present time, foreign companies importing and selling goods to Australian consumers are not required to charge GST when the total value of goods sold to the consumer is less than $AUD 1,000 (the sale of "low value goods").
The GST rules from 1st July 2018
To ensure that foreign importers are treated in the same way as Australian retailers, all imported sales to Australian consumers by a foreign business will now be required to charge GST. The lower threshold is being removed.
GST will be paid at the Australian border along with customs duty where the value of the goods exceeds AUD $1,000.
Where the goods have a total value below AUD $1,000, then either the retailer or the Electronic Distributions Platform selling the goods will be required to charge GST directly to the Australian consumer and remit the GST to the Australian Taxation Office (ATO) on a periodic basis (monthly or quarterly depending on turnover).
Australian Tax Office support
Australia's tax authority (The ATO) has issued a webcast about the changes (including the registration requirements) and will host in-country seminars in November in England, Belgium, China, Hong Kong and the U.S. in November 2017.
For advice on GST in Brisbane, Australia
Please contact Jamie Towers, Tax Partner at Hanrick Curran in Brisbane. Hanrick Curran helps many international clients to manage their Australian tax compliance obligations.