More about Australia's GST

Business Expenses

Business travellers to Australia pay GST on most goods and services. For example, Australian hotel costs, conference fees and taxi fares all include GST. Invoices for these expenses will show that GST has been charged. Contact EasyGSTrefunds to let us help you claim a refund of this GST.

Goods Exported from Australia

If your business outside of Australia pays for goods from an Australian supplier and these goods are not exported from Australia within 60 days of payment, then GST will apply to the transaction. If your business outside of Australia pays to transport goods within Australia prior to them being exported from Australia, these transport costs may include GST. These are just two examples of how a purchase of goods exported from Australia may include a payment of GST.

In general terms, GST is not intended to apply to goods and services which are exported from Australia and there are specific provisions in the GST law designed to make exports GST-free. Despite this, overseas businesses which purchase Australian goods and services often find that the price payable includes GST.

For details of Australia’s exports and the relevant provisions which may make these exports GST-free, click here. The easy way to tell if you have been charged GST on goods exported from Australia is to take a look at the contract or purchase invoice, which will clearly indicate if GST is included in the purchase price. If you have paid GST, please contact EasyGSTrefunds.

General Background Information

Australia's GST was introduced with effect from 1 July 2000 and is currently imposed at a rate of 10%.

Through a registration and tax return process, it is usually possible for businesses outside of Australia to claim a refund of GST that they have paid. To be entitled to a refund, it is important to retain evidence of the payment of GST. The required evidence is a tax invoice. Most invoices issued by Australian businesses are in the form of a tax invoice.

Australia’s GST is equivalent to consumption taxes in other parts of the world. In the European Union, the consumption tax is called value added tax or VAT. Some other countries, such as New Zealand and Canada, also refer to their consumption tax as a goods and services tax.

Australia’s main GST provisions are set out in a piece of legislation called the A New Tax System (Goods and Services Tax) Act 1999. This legislation, as amended, includes over 680 sections and consolidated versions run to over 580 pages, not including the relevant regulations. Administration of the GST is handled by the Australian Taxation Office. The views of the Australian Taxation Office are expressed in Public Rulings and there are more than 70 Public Rulings concerning the operation of the GST. The ultimate arbiters of the meaning of the GST legislation are the Australian courts and the volume of relevant case law is growing.

Australia’s GST in historical perspective

Recent GST Developments

24 November 2007: Change of Australia’s Federal Government but no change to the GST.

After coming to power in 1996, John Howard’s Coalition Government introduced Australia’s GST with effect from 1 July 2000. In the lead-up to the 2007 Federal election, both the Howard Government and the Opposition Labor Party pledged not to make changes to the GST if elected (click here to read about the promises made). Voting on 24 November 2007 saw Labor’s Kevin Rudd elected as the 26th Prime Minister of Australia and the second to preside over Australia’s GST.

1 July 2007: Turnover threshold for compulsory GST registration increases by 50 percent.

Prior to 1 July 2007, businesses with an annual turnover of more than $50,000 were required to register for GST. From 1 July 2007 onwards, this compulsory registration threshold has now increased to $75,000. For non-profit organisations, the threshold has increased from $100,000 to $150,000. (Click here to read an overview of the changes.) For businesses located outside of Australia, special rules apply as to which sales count towards the turnover threshold for compulsory GST registration. GST registration is necessary in order to claim a GST refund and businesses below the turnover threshold may choose to voluntarily register for GST. EasyGSTrefunds can assist you in this process.

6 November 2006: Singapore’s Prime Minister, Lee Hsien Loong, has announced that Singapore’s GST, currently set at a rate of 5%, will rise to 7%; no such change has been foreshadowed for Australia’s GST.

Australia’s GST is set at a rate of 10%. The legislation introducing Australia’s GST includes a mechanism designed to prevent future Commonwealth parliaments from increasing the tax rate except with the agreement of each of the State and Territory governments. It is a question of constitutional law as to whether this attempt to fetter the legislative capacity of the Commonwealth is effective. There is no indication that the Australian government is currently contemplating an increase in the rate of Australia’s GST.

19 April 2006: The Australian Taxation Office has released a determination regarding the GST implications of repair services provided under a warranty given by a non-resident manufacturer.

GST Determination GSTD 2006/2 gives the Commissioner’s views as to the operation of relevant provisions of the A New Tax System (Goods and Services Tax) Act 1999 and in particular the interaction between subsection 38-190(1) and subsection 38-190(3). An example of a situation to which these provisions may apply is where there is a warranty from a non-resident manufacturer to an Australian customer and pursuant to that warranty repair services are provided to the Australian customer. The Commissioner’s view is that such repair services will probably be subject to GST. The full text of GSTD 2006/2 can be found at the following link: www.ato.gov.au

9 March 2006: EasyGSTrefunds has made a formal submission to the Australian Taxation Office regarding the procedural requirements for GST registration of non-resident companies.

In administering the legislation dealing with registration of entities for GST purposes, the Australian Taxation Office requires that companies outside of Australia produce certain documentation. The nature of these requirements could potentially deter otherwise eligible companies from registering for GST. In a four page submission timed to coincide with a review of policy and procedures, EasyGSTrefunds has sought that a more flexible approach be adopted by the Australian Taxation Office when considering the GST registration of non-resident companies. EasyGSTrefunds is well-placed to assist companies from outside of Australia to negotiate the demands of the GST registration process.

24 May 2005: The Inspector-General of Taxation has released a report into the administration of GST refunds arising from the lodgment of Business Activity Statements.

The Inspector-General of Taxation has released a report into the Australian Taxation Office’s administration of GST refunds arising from the lodgment of Business Activity Statements. The report notes that during the 2003-2004 tax year, 4.3% of all Business Activity Statement refunds were stopped for manual checking. These stopped refunds amounted to approximately AUD$20 billion and represent about 90% of the total value of Business Activity Statement refunds claimed. The full text of the Inspector-General’s report, including his key recommendations, can be found at the following link: www.igt.gov.au

1 April 2005: Services supplied on or after 1 April 2005 to the owners of Australian property who are not residents of Australia are the subject of two new factsheets published by the Australian Taxation Office.

The Australian Taxation Office has published two factsheets regarding services supplied to non-resident property owners on or after 1 April 2005. The first of these factsheets explains the GST treatment of real estate services supplied to non-resident owners of Australian residential properties on or after 1 April 2005. The second factsheet explains the GST treatment of repair and maintenance services supplied to non-resident owners of Australian residential properties on or after 1 April 2005. The full text of these two factsheets can be found at the following link: www.ato.gov.au

30 March 2005: GST Ruling 2005/2 is released concerning the GST treatment of supplies of goods and services in the repair, renovation, modification or treatment of goods from outside Australia whose destination is outside Australia.

The Australian Taxation Office has released GST Ruling 2005/2 concerning the GST treatment of supplies of goods and services in the repair, renovation, modification or treatment of goods from outside Australia whose destination is outside Australia. This Ruling softens the stance taken by Australian Taxation Office in relation to which goods and services qualify for GST-free treatment under section 38-185(1) and section 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999. The Ruling concedes that use of goods in Australia before or after the supply does not necessarily prevent the repair services, or supplies of goods used in providing those services, from being GST-free supplies if on arrival in Australia the goods have a destination outside Australia. The full text of GST Ruling 2005/2 can be found at the following link: www.ato.gov.au