Indirect tax - Australia

GST is a tax on final consumption in Australia.

The GST is calculated at the rate of 10% of the GST-exclusive price of the goods and services provided.

Where GST does not apply because the supply is either GST- free or input taxed, a rate of 0% applies. The following table provides some examples of GST-free and input taxed supplies.

The following table summarises the types of supplies and related GST treatment.

An entity that is carrying on an enterprise, whose current or projected annual turnover is AUD 75,000 or more (excluding GST).

Non-profit bodies are not required to be registered unless their current or projected annual turnover is AUD 150,000 or more (excl. GST).

Taxi operators are required to be registered regardless of their annual turnover.

Voluntary registration is available for domestic and overseas companies.

Yes. Non-resident entities that make supplies that are connected with Australia are required to register if the registration turnover threshold is met. A non-resident enterprise is required to be registered if its GST turnover is at or above 75,000 AUSD.

GST applies to sales of imported services and digital products to Australian consumers. Offshore supplies will have a GST liability if they meet the GST registration threshold of AUD 75,000. Examples of digital products include the streaming/ downloading of music, movies, games, apps, and e-books. Examples of imported services include consultancy, educational, and professional services (e.g. legal services).

On 1 July 2018, the previous low value goods (AUD 1,000 or less) threshold for importation was abolished. Goods supplied by offshore retailers to Australian consumers will now  be taxable. Offshore suppliers will have a GST liability if they meet the GST registration threshold of AUD 75,000.

If a supply is made through an Electronic Distribution Platform (EDP), the GST liability on the supply will generally shift from  the supplier to the platform operator. An EDP includes, for example, an App store or an online marketplace (eg Amazon, eBay). An offshore entity that makes supplies to Australian consumers solely through an EDP may not be required to register for GST if the EDP accounts for and remits the GST on these supplies.

Where an offshore entity meets the GST registration threshold, has the option to access a limited GST registration system.

Under this simplified system, the entity will not be entitled to an Australian Business Number, must account for GST quarterly, will have no requirement to issue tax invoices, and will not be entitled to claim input tax credits back. An offshore entity may still choose to register under the full registration system.

Not applicable.

A Business Activity Statement (BAS) is required to be lodged by a registered entity to the Australian Taxation Office (ATO) to record its GST and other tax liabilities.

An entity must either lodge its BAS on a monthly or quarterly basis. Generally, most small businesses lodge their BASs on a quarterly basis. However, an entity must lodge its BAS monthly if    its annual turnover is more than AUD 20 million or it has chosen  to lodge monthly.

An entity with a monthly tax period must lodge its BAS by the 21st day of the month following the end of the tax period. In the case of entities with quarterly tax periods, the BAS must be    lodged by the dates shown in the following table:

Taxpayers who fail to meet their tax obligations may be liable for penalties and interest charges. When the ATO finds an error or omission, they take into account the circumstances of the individual, including their compliance history, when deciding what action to take, particularly for any penalties or possible prosecution action. Relevant circumstances include the reasons for the discrepancy or failure to meet a tax obligation and how well the taxpayer has complied with their tax obligations in the past.

A penalty is an amount that is calculated using either a statutory formula or in multiples of a penalty unit.

The types of penalty which apply can be administrative, civil or criminal. Civil and criminal penalties are imposed by courts and administrative penalties are imposed without the need for court action.

Interest charges apply to unpaid amounts, such as shortfall amounts, late payments and tax debts. Interest charges apply whether or not a penalty applies. Having interest charges applied to a shortfall amount does not depend upon, or imply, dishonesty on the taxpayers’ behalf.

Not applicable.

Yes. A range of penalties can be imposed where businesses do not comply with the GST rules.

Civil penalties and interest can be applied for errors and omissions made on tax returns, or where the tax is paid late. Penalties can also be applied where the business has failed to maintain adequate records, provide information (including additional declarations), or makes repeated mistakes.

Criminal proceedings may be brought in the case of more serious matters.

No. A company must be registered for GST before it is entitled to any input tax credits.

A GST invoice must show:

• the supplier’s identity and Australian Business Number (ABN)
• the recipient’s identity or the recipient’s ABN – if the total price of the supply or supplies is at least $1,000 or such higher amounts as the regulations specify, or if the document was issued by the recipient
• what is supplied, including the quantity (if applicable) and the price of what is supplied
• the extent to which each supply, to which the document relates, is a taxable supply
• the date the document is issued
• the amount of GST (if any) payable in relation to each supply to which the document relates
• if the document was issued by the recipient and GST is payable in relation to any supply – that the GST is payable by the supplier.