Changes to GST & Overseas Businesses

New GST law changes impacting overseas businesses

There are two changes to the application of the Australian goods and services tax (GST) that will impact overseas businesses selling to Australia.

The changes are:

GST on imported services and digital products

From 1 July 2017 GST applies to sales of imported services and digital products to Australian consumers. This means Australian consumers buying imported services or digital products may have GST included in the price of these purchases. This includes digital products such as streaming or downloading of movies, music, apps, games and e-books, and services such as architectural or legal services.

If overseas businesses make these supplies and meet the registration turnover threshold of A$75,000, they are required to register for and pay GST. However, overseas businesses will not be required to pay GST on supplies they make to Australian registered businesses who have provided them with their ABN and state they are registered for GST.

A simplified GST registration system has been designed for overseas businesses and is available now for GST on imported services and digital products. Alternatively, overseas businesses who choose not to use the simplified registration system can register using the existing GST system.

GST on low value imported goods

From 1 July 2018 GST will also apply to sales of low value goods imported by consumers into Australia.

GST on low value imported goods will apply to physical goods sold to consumers and imported into Australia that have a value equal to or less than A$1,000. These goods are currently exempt from GST.

Further information on these changes is available here.