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TAX GUIDE: Australia legislation change

Australia to introduce new tax duty guidelines from 1st July 2018.

In 2017, the Australian government agreed on a new legislation on goods and services tax (GST) in order to level the playing field between Australian goods and imported products, which will be enforced from 1st July 2018 onwards. The legal reforms aim to ensure that both Australian goods and foreign low-value products are subject to the same tax regime.

Current situation with GST and Duty

  • All shipments where cost of shipping and Shipment value is below AUS$1,000 is not liable for GST or Duty (low value goods)
  • It is assumed that in the value we declare from the shipper that the shipper has included the cost of shipping in its declared value – we do not need to declare a separate value for cost of shipping.

 

GST Change: 1st July

  • GST will be liable for all shipments in to Australia
  • GST rate is 10% against shipping cost and value of goods
  • Duty threshold is retained at AUS $1000
  • Australian Tax Office (ATO) has dictated that retailers must register for GST payment – the retailer will be responsible for the 10% GST payment to the ATO
  • Retailers will need to submit GST payments to ATO quarterly

 

Who has to register for GST?

  • An operator of an electronic distribution platform (EDP), such as an online marketplace through which merchants sell goods, or the merchant who sells the goods, or a re-deliverer (overseas mailbox, shopping service) that helps to bring goods to Australia.

 

How does a company register for GST?

  • Businesses can register for Australian GST quickly and easily using the ATO’s simplified online registration and pay only process designed for international businesses; this will create a GST registration number otherwise known as the ARN (Australian reference number)
  • Alternatively, the retailer can register using Australia’s standard domestic GST system. They will need to apply for an Australian business number (ABN) before they can register. It could take more than 28 days to process their GST registration using this option.
  • For reference http://ato.gov.au/ausgst

 

Summary

  • Retailers are responsible for determining their own GST status
  • Retailers are responsible for registering with ATO
  • Retailers are responsible for submitting their own GST payments to the ATO
  • Retailers will have to declare the 10% GST on receipts/commercial invoices to consignees (retailer invoice to consignee)

 

How can Woodland assist?

  • Using Woodland parcel services we will support via DDP entry in to Australia
  • If using our direct entry solution we can simplify the process by supporting registration through the registration portal
  • Using Woodland for parcels ensures the merchant will be 100% compliant with the ATO
  • Woodland can help manage all ongoing reporting (no ongoing requirements for 
    the merchant)

 

 

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