Goods and services tax (GST) in Australia is a 10% value added tax on most goods and services sales, with exemptions (certain food, healthcare items). GST is imposed on most businesses, and in many cases, refunded to all parties in the chain of production, final consumer not included.
Australian businesses that have registered for GST need to account and pay the tax to the Australian Taxation Office (ATO).
GST registration
You’ll have to register for GST if:
- your business has a GST turnover of $75,000 or more
- your non-profit organisation has a turnover of $150,000 per year or more
- you provide taxi or limousine travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover.
GST turnover is your business’ gross income (not your profit).
You don’t have to register for GST if your business doesn’t fit into one of the above.
If you don’t register for GST, you won’t include a GST component in your prices. This means that any invoices you provide will need to show that GST was not included in the purchase price. You also can’t claim GST credits for your business purchases.
How to register
- You can register for GST once you have an Australian Business Number (ABN).
- You can register for GST:
- via the Business Portal
- through your registered tax agent or BAS agent
- by phone
Overseas businesses selling to Australian consumers
An overseas business importing services and digital products to Australian consumers that meet the $75,000 registration threshold must register for GST.
If you’re an overseas business making over $75,000 and sell low value imported goods to Australian consumers, goods valued at $1000 or less on items will be affected, such as:
- books
- electric appliances
- clothing
- cosmetics.
GST credits
GST credits are amount of money your business can potentially claim from the ATO — included in the purchase price of something you’ve bought for your business.
Tax invoices
As they include the GST amount for each item along with some extra details, tax invoices are different to regular invoices.
Tax invoices must be formatted correctly for you to be able to claim your full tax entitlements.
GST concessions for Small business
You may be able to access the following GST concessions if your business has an annual turnover of less than $10 million (small business).
- Accounting for GST on a cash basis — You can account for GST on the business activity statement that covers the period in which you made the sales and purchases. Then, you would claim any GST credits in the same tax period.
- Paying GST by instalments — You can pay GST by instalments that ATO work out for you and vary this amount each quarter if you choose.
- Annual apportionment of GST input tax credits — You can choose to claim full GST credits if you purchase items that you use partly for private purposes on your activity statements. Make a single adjustment to account for the private use percentage after the end of your income year.
Note: For checklists on assessing your GST compliance and risk management processes, download the ATO’s Tax risk management and governance review guide.
For more personal advice about your business and tax, consult your accountant.
Small business loans in Australia
Cigno Business Solutions offers small business loans which are catered mostly to small businesses, with an online application process that’s as simple as possible.
CBS offers a flexible range of loans up to $10,000.
In order to complete the application, you’ll just need to have:
- a registered ABN
- a 90-day bank statement
You can start the application process here!
Note: Don’t forget to check out CBS’s Privacy & Credit, Disclosures & Authorisations, and Responsible Lending Criteria for more details.
Contact the CBS team directly for enquiries on eligibility, requirements, and other information to better your chances for approval.
