Short Answer
For overseas businesses targeting the Australian market, understanding when you must register for Goods and Services Tax (GST) is critical to avoid penalties, interest, and reputational damage. Australia’s GST system applies to many supplies made by non-residents if those supplies are connected with Australia and your GST turnover exceeds the registration threshold. This pillar article explains the key rules, thresholds, and practical steps for sole traders, small business operators, bookkeepers, and importers. You will learn how to determine your liability, navigate the low value imported goods regime, handle digital services, and understand the role of electronic distribution platforms. Use this as your definitive reference before expanding into the Australian market.
1. The GST Registration Threshold for Overseas Businesses
What is “GST Turnover”?
GST turnover is the total value of all supplies you make that are connected with Australia, excluding GST itself. For overseas businesses, only supplies that are connected with Australia count toward the threshold. You must also include supplies made by your closely associated entities (e.g., related companies) if they are part of the same enterprise.
The $75,000 Threshold (and $150,000 for Non-Profits)
If your current GST turnover (from Australian-connected supplies) is $75,000 or more in any 12-month period, you must register for GST. For non-profit organisations, the threshold is $150,000. This applies to both residents and non-residents. However, the way you calculate turnover differs for overseas sellers.
Calculating Turnover for Non-Residents
You must project your turnover for the current month and the next 11 months. If that projection exceeds $75,000, you must register within 21 days. You can also voluntarily register if below the threshold, but this is generally not recommended unless you need to claim input tax credits.
| Entity Type | GST Registration Threshold | Notes |
|---|---|---|
| Resident business | $75,000 | Standard threshold |
| Non-resident business | $75,000 | Only supplies connected with Australia count |
| Non-profit organisation | $150,000 | Higher threshold applies |
2. Supplies Connected with Australia – The Key Test
Definition for Goods
Goods are connected with Australia if they are delivered in Australia or if the supplier imports them into Australia. For example, if you ship a physical product from your overseas warehouse to an Australian address, that supply is connected with Australia.
Definition for Services and Digital Products
Services and digital products are connected with Australia if the recipient is in Australia (i.e., the customer is an Australian resident or business). This includes software downloads, streaming subscriptions, online courses, consulting services, and professional advice provided to an Australian client.
Examples: What Counts and What Doesn’t
- Counts: A US-based SaaS company selling subscriptions to Australian businesses; a UK artist selling digital downloads to Australian consumers; a Chinese manufacturer drop-shipping goods directly to Australian customers.
- Does not count: A French consultant providing services to a French client while the consultant is in France, even if the client later uses the work in Australia; goods sold to an Australian tourist while they are overseas and the goods are delivered overseas.
Expert Tip: If you supply a bundle of goods and services (e.g., a physical device with a software subscription), you must apportion the value. The GST treatment may differ for each component. Always seek professional advice for mixed supplies.
3. GST on Low Value Imported Goods (LVIG)
The $1,000 Threshold and the 2018 Reform
Since 1 July 2018, GST applies to low value imported goods (goods with a customs value of $1,000 or less) that are sold to Australian consumers. Previously, these goods were GST-free at the border. Now, the overseas seller (or the electronic distribution platform) must collect and remit GST at the point of sale.
Who is Liable: Overseas Seller vs. Electronic Distribution Platform
If you sell directly to Australian consumers, you are liable for GST on LVIG if your turnover exceeds $75,000. However, if you sell through an electronic distribution platform (EDP) like Amazon, eBay, or Etsy, the platform is usually treated as the supplier and is responsible for GST. You may not need to register if the platform handles GST.
Practical Example: Selling T-shirts to Australian Customers
You run a US-based online store selling T-shirts for $30 each (including shipping). You ship directly to Australian addresses. If your total Australian sales exceed $75,000 in a year, you must register for GST, charge 10% GST on each sale, and remit it to the ATO. If you sell through Amazon’s Australian marketplace, Amazon may collect GST on your behalf.
| Scenario | GST Liability | Who Remits GST? |
|---|---|---|
| Direct sale, turnover < $75k | No registration required | N/A |
| Direct sale, turnover ≥ $75k | Must register and charge GST | Overseas seller |
| Sale via EDP (e.g., Amazon) | Platform is supplier | EDP |
4. GST on Digital Services and Other Services from Overseas
What are “Digital Services”?
Digital services include streaming of video, music, and games; downloads of software, e-books, and apps; online education; cloud computing; and website hosting. The ATO broadly defines them as services that are delivered via the internet or electronic network and are essentially automated with minimal human intervention.
Registration and Compliance for Service Providers
If you provide digital services to Australian consumers and your GST turnover from those services exceeds $75,000, you must register for GST. You must charge 10% GST on each sale and lodge Business Activity Statements (BAS) quarterly or monthly. You can claim input tax credits for any GST incurred on your Australian business expenses.
Example: A UK-based SaaS Company
A UK company sells project management software to Australian businesses. The software is accessed online. If the company’s Australian turnover exceeds $75,000, it must register for GST, add 10% to its subscription fees, and remit the GST to the ATO. The company can also claim back GST on Australian hosting fees or marketing costs.
5. The Role of Electronic Distribution Platforms (EDPs)
Definition of EDP under GST Law
An electronic distribution platform is a website, marketplace, or other electronic facility that allows third-party suppliers to make supplies to end consumers. Examples include Amazon, eBay, Etsy, and the Apple App Store. The ATO treats the EDP as the supplier for GST purposes if the platform controls key aspects of the transaction (e.g., payment processing, delivery terms, or customer service).
When the Platform is the Supplier
If the EDP is the supplier, the overseas seller does not need to register for GST for those sales. The platform collects GST from the consumer and remits it to the ATO. However, the seller may still need to register if they make other supplies (e.g., direct sales) that exceed the threshold.
Impact on Overseas Sellers Using Amazon, eBay, etc.
If you sell exclusively through an EDP that handles GST, you generally do not need to register. But you must ensure the platform is registered for GST and is compliant. If you also sell through your own website, you must track your direct sales separately. If combined direct sales exceed $75,000, you must register.
Important Note: Some EDPs may require you to provide an ABN or GST registration number even if you are below the threshold. Check the platform’s terms. Also, if you are a non-resident and the EDP is not registered, you may still be liable.
6. Registration Process for Non-Resident Businesses
How to Register for GST as an Overseas Entity
You can register for GST online via the Australian Business Register (ABR) or through the ATO’s Business Portal. You will need to obtain an Australian Business Number (ABN) first. Non-residents can apply for an ABN without needing a physical presence in Australia.
Required Information and Documentation
- Your business name and legal structure (sole trader, company, etc.)
- Your overseas address and contact details
- Your tax identification number in your home country
- Estimated GST turnover from Australian-connected supplies
- Bank account details for refunds (if any)
Using a Registered Tax Agent or BAS Agent
Many overseas businesses engage a registered tax agent or BAS agent to handle registration and ongoing compliance. This is highly recommended because non-residents often face complex rules regarding currency conversion, record-keeping, and lodgment deadlines.
GST Reporting and Lodging BAS
Once registered, you must lodge Business Activity Statements (BAS) either monthly or quarterly. You report your total sales (including GST), GST collected, and any input tax credits. Payments are due 21 days after the end of the reporting period. Late lodgment attracts penalties.
7. GST Calculator & Tools
At gstcalculatorau.com, we provide a full suite of GST calculators to help overseas sellers quickly determine GST amounts, net prices, and total inclusive prices. Our tools are designed for sole traders, small businesses, bookkeepers, and importers.
How to Use the GST Calculator
- Select the calculator type: Add GST (to calculate total including GST) or Remove GST (to find the GST component from a total).
- Enter the amount in Australian dollars (AUD).
- Click “Calculate”. The tool instantly shows the GST amount (10%) and the total.
- For multiple items, use the bulk calculator to process a list of prices.
Sample Calculation Table
| Price (excl. GST) | GST (10%) | Total (incl. GST) |
|---|---|---|
| $100.00 | $10.00 | $110.00 |
| $250.00 | $25.00 | $275.00 |
| $1,000.00 | $100.00 | $1,100.00 |
Our calculator also supports reverse calculations and can handle multiple currencies with live exchange rates (for reference only). Use it to ensure you charge the correct GST on your Australian sales.
8. Common GST Mistakes to Avoid
- Ignoring the threshold for non-residents: Many overseas businesses assume they are exempt because they are not based in Australia. The $75,000 threshold applies to all supplies connected with Australia.
- Failing to account for EDP sales: If you sell through a marketplace, you may still need to register for your direct sales. Do not assume the platform covers everything.
- Not registering on time: You must register within 21 days of exceeding the threshold. Late registration can result in penalties and backdated GST liability.
- Incorrectly classifying supplies: For example, treating a digital service as a good, or vice versa. Use the ATO’s guidance or consult a professional.
- Forgetting to claim input tax credits: If you are registered, you can claim back GST on Australian expenses like advertising, warehousing, or legal fees. Many overseas sellers miss this.
- Using incorrect exchange rates: When converting foreign currency to AUD for GST purposes, use the ATO’s approved exchange rate (usually the rate at the time of the supply).
Conclusion
Understanding when you must register for Australian GST is essential for any overseas business selling to Australian consumers. The key thresholds, the “connected with Australia” test, and the special rules for low value goods and digital services can be complex, but with careful planning you can remain compliant. Use the GST calculator suite at gstcalculatorau.com to quickly compute GST amounts, and explore our searchable database for real-world examples of how GST applies to specific goods and services. For personalised advice, always consult a registered tax agent or BAS agent familiar with cross-border GST.
FAQ
Do I need an Australian business address to register for GST?
No. Non-residents can register for an ABN and GST without a physical presence in Australia. You can use your overseas address.
What if I sell both goods and digital services to Australian customers?
You must include both types of supplies in your GST turnover calculation. If the total exceeds $75,000, you must register. The GST treatment may differ for each type.
Can I claim input tax credits if I am a non-resident registered for GST?
Yes. If you are registered, you can claim input tax credits for GST incurred on Australian business expenses, such as advertising, warehousing, or professional fees.