Australian GST compliance and rates

Australian goods and services tax (GST) is a broad-based tax of 10% on most goods and services.

GST requires recalculation and payments to the Australian taxation office (part of the federal government) at each transaction point in the onward sales chain.

Generally, businesses registered for GST will include GST in the price they charge for their goods and services, and claim credits for the GST included in the price of goods and services they buy for their business.

Businesses that exceed the turnover threshold of AUD 75,000, or expect to do so within the next 12 months, must register for Australian GST.

Once registered for GST and in possession of an Australian business number, businesses must file periodic GST returns, known as Business Activity Statements (BAS).

The frequency of returns depends on the trader’s turnover and is determined at the time of registration.

The BAS lists all of the company’s transactions relating to the supply of the relevant goods or services.

Any GST due should be paid simultaneously with the filing of the BAS return.

In the case of a tax credit (where the GST incurred by the company exceeds the GST charged on its sales in the reporting period), documentary proof related to the transactions is often requested by the tax office.

Businesses can claim GST credits if GST is included in the price of goods and services they purchase as part of their business operations.

This is referred to as an input tax credit or a GST credit, as it’s a credit for the tax included in the price a business inputs.

Businesses must be registered for GST to claim input tax credits.

Businesses can claim credits if:

• The business uses the purchase solely for its operations

• The purchase price included GST

• The business is liable to provide payment for the purchased item

• The business can produce a tax invoice from the supplier

To help remain compliant with GST laws, businesses should include the following information on their invoices to Australian customers:

• Business name and address

• Business tax number

• Invoice date

• Invoice sequencing number

• Description of the goods or services

• Rate of tax applied to each item

• Total amount including tax

There is no provision in Australia for value added tax (VAT) reclaims along the lines of the European Union’s 8th and 13th VAT Directives.

Instead, non-resident companies must register for GST as outlined above.

As part of the Tourist Refund Scheme (TRS), international travellers may be able to claim a GST refund for various goods they’ve purchased while in Australia (which are then taken out of the country via plane or ship).