Australian Tax Regulations For Online Business....

Australia's Goods and Services Tax (GST) is a broad-based consumption tax, currently charged at the rate of 10% on the sale of most goods and services and other things in Australia.

Various issues can affect your tax obligations and it is a complicated legal area so you should obtain qualified legal tax advice.

The information provided below is a brief outline of tax obligations as they currently stand, however these laws and obligatons can change over time, therefore they are provided as a brief guide only.

Internet sales do not escape GST.....

Internet sales do not escape GST (Goods & Services Tax). You will need to comply with tax obligations relevant to your e-business.

Generally speaking, if you are selling or re-selling goods or services, whether supplied to you locally or from overseas suppliers (including digital goods / products such as software or e-books), you will need to charge your customers GST.

Overseas customers may be exempt from GST (See - "Supplying Customers Outside of Australia").

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Supplying customers within Australia.....

In general, the GST applies to online sales of goods and service if both supplier and recipient reside in Australia, excluding goods and services specifically listed as exempt from GST.

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Supplying customers outside of Australia.....

Goods sold on the internet by Australian businesses to consumers outside of Australia are still usually subject to GST. In some instances, supplies of things such as Digital Goods may be GST free. (See Digital Goods - Consumption Outside Australia....)

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Purchasing from suppliers overseas.....

GST can apply to goods and services purchased by an Australian resident from an overseas supplier.

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Digital Products & GST (ie; e-books, Software).....

This is a complex area & it can depend on where the digital product(s) come from & whom purchases the goods as to whether or not GST applies.

Generally speaking, Australian businesses -

• Need to pay GST on purchases of Digital goods supplied by Australian producers.....

• Will usually need to pay GST on purchases of Digital Goods supplied by overseas suppliers....

• They must always charge GST when re-selling Digital Goods to Australian consumers, and

• They may need to charge GST when re-selling Digital Goods to Overseas consumers (See - Digital Goods - Consumption Outside Australia).

• For more details see: http://www.ato.gov.au/businesses/content.asp?doc=/content/18428.htm

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Digital Goods - Consumption Outside Australia.....

(Source; ATO Website)

"Australian businesses retailing on the Internet are required to pay the GST on taxable supplies that they make. In relation to supplies of things other than goods or real property, where such supplies are consumed outside of Australia, they may be GST free".

However an Australian supplier must determine that the location of recipient is outside Australia for the transaction to be GST free.......

"The supplier has an obligation to determine whether the supply is for consumption outside of Australia........."
".........If both conditions are not satisfied, the supplier has a GST liability". (Source; ATO Website).

• For more details see: http://www.ato.gov.au/businesses/content.asp?doc=/content/18428.htm

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Supplies of digital products to Australian recipients (from non-resident suppliers).....

(Source - ATO Website)

"Generally a supply of anything, other than goods or real property is not connected with Australia unless the thing is done in Australia or supply is made through an enterprise carried on in Australia. If a supply is not connected with Australia it is not subject to GST".

"Most private consumers in Australia will not meet the criteria in section 84-5 and so will receive a supply that is not connected with Australia and which is not subject to GST". (Source - ATO Website)

• For more details on digital products & GST see:  http://www.ato.gov.au/businesses/content.asp?doc=/content/18428.htm

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Subsequant re-sale of Digital Goods....

In general, digital goods which are re-sold in Australia (regardless of their country of origin / supply) are subject to GST.

(Source - ATO Website);

"Where the recipient of an offshore supply subsequently re-sells a thing other than goods or real property, this subsequent re-sale may have GST implications regardless of whether the recipient originally "reverse charged" the GST on the supply or not by virtue of Division 84 in the GST Act.

GST is charged on taxable supplies, and section 9-5 of the GST Act states that a taxable supply is made where:

h. you make the supply for consideration; and
i. the supply is made in the course or furtherance of an enterprise that you carry on; and
j. the supply is connected with Australia; and
k. you are registered or required to be registered.

However, the supply is not a taxable supply if it is GST-free or input taxed.

Accordingly, where the recipient of an offshore supply (of a thing other than goods or real property) subsequently re-sells the thing and the requirements of section 9-5 of the GST Act are met, GST must be charged on the supply".

• For more details on digital products & GST see:  http://www.ato.gov.au/businesses/content.asp?doc=/content/18428.htm

You should always seek professional legal & or taxation advice for information that applies to your particular e-business.......

Business Transactions.....

GST may also apply to other transactions of your e-business, therefore it is important you obtain qualified legal tax advice on all aspects of taxation obligations that concern your particular e-business.

Providing Tax Invoices to customers.....

You must provide customers with tax invoices if they request it.

Websites must display GST inclusive prices......

Any prices displayed on your website must include the GST component in the total amount displayed.

Free Guides & Resources....

• GST for small business - Free guide from The Australian Tax Office:
  Website / Link: http://www.ato.gov.au/
  Details: "This guide provides an overview of GST and explains what you need to do to meet your GST obligations (NAT 3014)".
  "You can order a printed copy by noting the full title of the publication and either:
  
  
  • Visit ATO Online publications ordering service: http://www.ato.gov.au/corporate/content.asp?doc=/content/34875.htm,
  • or phone the Publications Distribution Service (which operates from 8.00am to 6.00pm, Monday to Friday) on 1300 720 092.

• Introduction to Goods and Services tax (GST) - From The Australian Tax Office:
  Website / Link: http://www.ato.gov.au/
  Details: "An introduction to the goods and services tax (GST), which is charged on most goods and services in Australia".

•  More information on Goods and services tax (GST):  http://www.ato.gov.au/individuals/content.asp?doc=/content/66994.htm

Contact The ATO (Australian Tax Office)...

(Source - ATO Website); "If you wish to contact the Tax Office with specific queries about The New Tax System and your business, you may contact GST Technical Advice by:

Faxing written requests to 1300 139 031
Emailing to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or
Writing to GPO Box 9935 in your capital city".