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Australian GST set to apply to nearly all imports into Australia

Australia’s Goods and Services Tax (GST) (VAT) rules on import of goods into Australia are set to change from 1 July 2018.

Australia’s GST rate is 10%.  A business is required to register for GST if its actual or anticipated sales over the next 12 months exceeds $AUD $75,000.   

Currently, foreign businesses importing and selling goods to Australian consumers are not required to charge GST unless the value of goods sold to the consumer exceeds AUD $1,000.

To ensure that foreign importers are treated the same as Australian retailers, from 1 July 2018, any sales (no lower threshold) to Australian consumers by a foreign business importing the goods to Australia will be required to charge GST.

Where the value of the goods exceed $1,000, then GST is paid at the border along with customs duty.

Where the good are less than $1,000, then either the retailer, or the Electronic Distributions Platform selling the goods will be required to charge GST directly to the Australian customer and remit the GST to the Australian Taxation Office  (ATO) on a periodic basis (monthly or quarterly depending on turnover).

The ATO has released a webcast about the changes including the registration requirements.  It also plans to host in-country seminars in November in Belgium, China, Hong Kong, England and United States in mid November 2017.

For further details, please refer to the attached ATO link:  https://www.ato.gov.au/Business/International-tax-for-business/GST-on-low-value-imported-goods/

Hanrick Curran assists many international clients to manage their Australian tax compliance obligations.

If you are a foreign business and require assistance with your Australian tax compliance, or require advice on how the Australian tax laws will apply to your business, please contact Jamie Towers.

 

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.