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Australia Changes GST Laws for Imports Under A$1,000

June 29th, 2018

International e-commerce sellers that ship products to Australia should be aware of a new tax starting July 1, 2018. The Australia Goods and Services Tax (GST) is a 10% fee that the Australian government adds to all goods and services being imported into Australia. The GST is meant to help protect Australian businesses from cheaper overseas manufacturers, with the hope the tax will level out the retail product pricing.

Australia’s Goods and Services Tax – What is Changing?
Prior to July 1, 2018, consumers in Australia could purchase products from international sellers and have them imported duty and tax-free as long as the product value was less than A$1,000. (GST was already being applied to goods and services over A$1,000.) This created a perfect buying market for U.S. online retailers since most e-commerce orders were low-value items such as sporting equipment, clothing, jewelry, cosmetics and electronics.

Starting on July 1, 2018, Australia will now apply the 10% GST to all imports, including products valued under A$1,000.

International E-Commerce Sellers – Registering for GST
Retailers with OVER A$75,000 annually in revenue
In order to comply with the recent changes made to the GST, international e-commerce merchants who have over A$75,000 annually in sales (sales directly to Australia) will be required to register with the Australian Taxation Office. Once registered, online retailers will need to charge and collect the GST tax when selling goods to Australian buyers. Note: This GST tax collection by the online retailer will be indicated on the customs documents.

Retailers with UNDER A$75,000 annually in revenue
If your sales are under A$75,000 you are not required to register with the Australian Taxation Office. When you sell a product to an Australian buyer, the GST tax will be applied at the border when the product is imported.

Be Ready for the New GST Law Changes!
If you are an international e-commerce merchant selling to Australia with sales over A$75,000, you MUST comply with the new regulations.

There are severe penalties for not complying with the GST law, including:

  • Imposing an additional 75% administrative penalty (legally payable)
  • Intercepting funds from Australian buyers that are destined to seller account(s)
  • Registering the debt in a court in the U.S.
  • Requesting the Internal Revenue Service to recover the debt on behalf of Australia

Register your company as a GST business with the Australian Taxation Authority.

Stamps.com has you covered when it comes to shipping your goods overseas!  The shipping platform fully supports the new GST requirements. If you’re shipping items to Australia for your business, you will not need to add additional information to the labels on your packages to be in compliance with the new law.

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