Goods and services tax (GST) applies to most goods and services sold in Australia. Find out how to register and what it means for your business.
Goods and services tax (GST) is a tax of 10% on most goods, services and other items sold or consumed in Australia. If your business is registered for GST, you have to collect this extra money (one-eleventh of the sale price) from your customers. You pay this to the Australian Taxation Office (ATO) when it’s due.
You must register for GST if:
If you’re a non-resident there are special rules that may apply to you.
Otherwise, registration for GST is optional.
If you already have an Australian business number (ABN), register for GST online through the Business Registration Service. You can use the same form to register for other taxes at the same time.
Don’t have an ABN yet? You can register for GST at the same time you register for an ABN.
Open all Close allIf you’ve started a new business, you should register if you expect your GST turnover to reach $75,000 in the first year.
You have to register for GST within 21 days of becoming aware that your GST turnover will go over the threshold. It's a good idea to check each month to make sure you're not likely to go over the limit.
If your GST turnover is below the $75,000 threshold, you may choose to register. But if you do, regardless of your turnover, you must:
GST turnover is your business income (excluding certain sales), not your profit.
Say you run an online clothing store. If you sell $80,000 worth of clothes in a year, you’d have to register for GST. This is because your GST turnover is over the $75,000 threshold – even if you only make $40,000 in profit.
Head to the ATO website to work out your GST turnover.
You might be able to claim GST money back from the ATO.
If you’re registered for GST, you can generally claim back any GST included in the price of things you've bought for your business. These are GST credits.
If, for any tax period, your GST credits are higher than the amount of GST your business has to pay the ATO, you could get a refund.
Find out more on the ATO web page claiming GST credits.
Laura runs an accountancy firm and has just bought a new computer for the office. The computer cost Laura $1100, including GST. Because GST is one-eleventh of the sale price, Laura paid $100 GST.
Laura is registered for GST because her business’s GST turnover is more than $75,000. She is able to claim GST credits for the GST that was in the sale price of her computer ($100).
If you’re registered for GST, the invoice you issue to a customer must be a tax invoice. Tax invoices are different to regular invoices. They include the GST amount for each item (or state that the total price includes GST), along with some extra details.
For your customers to be able to claim their full GST credits, make sure you format tax invoices correctly.
Find out more about tax invoices, including how to correctly format them.
If your GST turnover is under $75,000 and you haven’t chosen to register for GST, you don't include GST in your prices. Any invoices you provide need to show that GST was not included. You also can't claim GST credits for your business purchases.
If your business has an aggregated turnover (your business’s turnover and the turnover of closely associated entities) of less than $10 million, you may be able to get the following GST concessions.
This means that you can account for GST and claim GST credits within the tax period when you actually are paid or pay a supplier, rather than based on when the invoices are received.
You can pay GST by instalments each quarter. These are based on what you or the ATO estimates your GST liability to be. You can vary this amount each quarter.
For a business purchase that you intend to use partly for private purposes, you can:
This is known as annual private apportionment of GST credits.
See the ATO's GST Governance and Risk Management Guide for checklists on assessing your GST compliance.
GST applies to most retail sales to Australian consumers of imported:
If your overseas business has a GST turnover of A$75,000 or more, you must register for GST.
Consider whether you need to register for GST if you operate an app store or website (electronic distribution platform) for the sale of imported services or digital products.
Find out more on the ATO website about GST on imported goods and services.
There are other options. You can register for GST: