The Goods and Services Tax for goods and services.
Applicable to the sale of imported services and digital products to non-residents and Australian consumers doing business in Australia.
When an offshore digital services provider is add as an Australian-operated electronic delivery services company. Businesses must be register for GST purposes. One example is iiNet / Netflix for global Netflix companies, other examples include big companies like Apple, Google, and Amazon.
IMPORTANT NOTE: For digital subscriptions and goods and services to Australia click on the Accounting Consulting Firms in Australia.
Therefore, due to the volume, the collected GST has to be reporte monthly. However, there is an option to opt for limited GST registration, as long as it does not mean that they will not have access to the input tax credit.
The adoption of GST for digital devices aims to provide equal opportunities to local businesses. This usually results in GST charges and remittances for digital products and services. They will not suffer any loss compared to their foreign counterparts.
What are digital products and services?
Key features include:
- Intangible devices such as digital content, games, software, streaming or downloading movies, music, apps, games, and e-books.
- It will expand to include consulting and professional services for programs run by external clients in Australia.
- Goods and services tax will be levied at the rate of 10% of the value of available goods.
- Selling products through eBay or other online systems.
- Services such as architecture or legal services
It is important to note that this only applies to consumer goods that are designe for consumers. Transactions between businesses are an exception, so the responsibility for this GST rests with the supplier or business operator.
Other factors determining who should pay GST:
- Able to identify business processes and resources
- It does not include digital tools related to education and health services.
In addition, items under 1,000 from overseas online suppliers imported by Australian consumers are not currently covered by the GST Act and are not subject to GST.
However, by July 1, 2018, offshore companies must register and charge GST on imported goods for less than $ 1,000.
Accounting for digital goods and services
An important issue facing bookkeepers when dealing with the purchase of digital products or services from abroad is to assess whether the Goods and Services Tax (GST) is taxable.
International businesses registered with the simple GST system do not need to invoice purchased products online, so you may be aware that digital goods transactions are paid through a platform type PayPal, which Must provide a receipt for Adequate money should be the best platform to report online purchases to process an online payment system.
We have compiled a list of external suppliers and registered partners in GST. If you meet someone who should be on the list, please explain in the comments.
Who should register in the Australian GST system?
International businesses selling digital products and services related to Australia with a combined sales revenue of over $ 75,000 must register and pay GST.
The best way to achieve this is to have a current year’s turnover or similar. The expected annual turnover is AUD 75,000 or more. (For non-profit organizations, the cost is A $ 150,000.)
If you are an Australian business registered with the Goods and Services Tax (GST), the Goods and Services Tax (GST) does not apply to digital services or products that you import for use in your business. If you are not registered for GST, then GST will be applicable on those purchases.
The supplier will not charge you GST if:
- Provide Australian Business Number (ABN), and
- You indicate that you are registere for GST.
Simple ARN and GST registration
ARN is part of the short, easy GST registration for ATO registration.
Non-Australians who sell to Australia are given an ARN for tax purposes:
- Online services and digital products for Australia
- Items less than AUD 1,000 (low-cost imported goods)
They cannot claim GST credit and have to file GST returns and pay GST every three months.