Importing or exporting goods? Our guide to understanding Goods & Services Tax
Goods & Services Tax associated with importing and exporting goods can be confusing. For this reason, we have outlined your GST obligations when importing and exporting to help you out.
IMPORTING
Goods & Services Tax and Importing Goods
10 per cent of the Australian value of the ‘Taxable Importation’ is GST payable. This is normally paid to the Department of Immigration and Border Protection before the goods are released to you.
‘Taxable importation’ includes:
- The customs value of goods in Australian dollars
- Any customers duty payable
- The amount paid or payable to transport the goods
- Insurance cost for the transport
- Any wine tax payable
Notably, sales of goods that have a customs value of $1000 or less are non-taxable importations.
When is Goods & Services Tax payable?
- Generally before goods are released – if you are registered for GST
- Generally at the same time that customs duty is paid – if you are not registered for GST
- You may be able to defer the payment if you meet certain criteria to be eligible to participate in the deferred GST scheme
EXPORTING:
GST and Exporting Goods
Exportation of Australian goods is generally GST free. This is because the Good & Services Tax is usually applied to items sold and consumed within Australian borders. However, there is an exception – if the supplier does not issue an invoice or receive payment for goods, within 60 days of the exportation, then these goods are not GST-free.
Notably, the supplier can apply for an extension beyond 60 days to the ATO.
GST and Exporting Services
If a service is physically performed in Australia then it is considered subject to Australia taxation law even if the supplier is a non-resident or the recipient is not receiving services within Australia. Generally, supplying services to a recipient outside of Australia is GST-free because it is not consumed within Australia.
Income Tax and Exporting
If you receive income from exporting goods and services then that income is subject to income tax because assessable income includes your worldwide income.
Earning income in another country can make things complicated because you may have to pay foreign tax in that country. Paying foreign income tax means that you may be able to a ‘foreign tax offset’ against your Australian income tax liability. Note that some foreign countries your export to may have a tax treaty with Australia.
The team at Fortis Accounting Partners can help you stay GST compliant when navigating this complex area of taxation.
If you have any queries or questions relating to taxation, please don’t hesitate to get in touch with the team at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
