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  1. #1
    Join Date
    Jul 2006
    Location
    Athelstone, SA 5076
    Posts
    3,706

    Default MMM I wonder of the ATO will grab me here australia

    I was looking around on the net and found this popup when I arrived at the site....

    G'day

    Come here for information throughout the shopping experience to learn more about what to expect when bringing goods into Australia.
    Duties and Taxes
    You can spend up to 1000 AUD and not incur any duty on your order. GST is 10% and due on any order above 1000 AUD.
    The low-value GST law passed July 1st, 2018 does not apply to this retailer. Learn more.




  2. #2
    Join Date
    Aug 2008
    Location
    near Rockhampton
    Posts
    5,868

    Default

    Sellers outside Australia selling direct to Australia do not have to "collect" GST if they sell into Australia less then a certain amount a year.

    In reality there is no obligation for any retailer outside Australia to collect tax for Australia. For some companies it is actually a money making venture. Think of the amount of ebay collects and then has free reign of that extra money for a period of time before it has to hand it to the government.
    Gold, the colour of choice for the discerning person.

  3. #3
    Join Date
    Oct 2007
    Location
    Alexandra Vic
    Age
    64
    Posts
    517

    Default

    Aussie residents in business don't have to register for GST if they turn over less than $75K p.a. but they cannot claim back the GST paid on their inputs. ie if they pay $20K p.a. for inputs to the business, do some value adding and sell their product or service for $60K p.a., they don't have to register for GST and pay it on the $60k, but they can't offset or recover the $2K of GST they incurred on the business inputs.

    The same basic threshold applies for business's overseas, if they make small individual direct sales to end users in Aus, there is a threshold of AU$75K p.a. of invoiced goods and services sold direct to Australian customers before the government requires them to collect and remit the GST. Not sure how the gov actually checks for compliance or can enforce it though. I know all packages coming into the country have their customs form and declared value, but doubt that they have an army of minions entering the supplier and declared value of every single package so that computers can analyse the data, maybe they use high speed OCR or something.

    Paypal doesn't get to hold collected GST in transit for very long, it passed to the vendor's account with the funds collected on their behalf, and compliance with our GST laws is the vendor's responsibility, Ebay and Paypal are only brokers and bankers for the deals.
    I used to be an engineer, I'm not an engineer any more, but on the really good days I can remember when I was.

  4. #4
    Join Date
    Sep 2012
    Location
    North Yorkshire UK
    Posts
    2,682

    Default

    Hi Guys,

    Actually all business costs including value added tax are off settable against income for tax purposes.
    Best Regards:
    Baron J.

  5. #5
    Join Date
    Oct 2007
    Location
    Alexandra Vic
    Age
    64
    Posts
    517

    Default

    Hi Baron,

    Our GST is like the UK's VAT, a tax based on turnover rather than income (wages, salary, interest earned, rent received etc) or profits (company tax). The primary difference is that with GST or VAT, the government aims to tax the entire turnover of a business, then taxes the income of an individual or profit of a company.

    Because it is generally recognised that it unfair to nest taxation, the government generally allows a rebate of the GST (VAT) paid on inputs to the business needed to create the turnover that it wants to tax. In the AU system, we used to be able to personally import goods from overseas with a landed value of less than AU$1,000.00 without being charged GST on the landed cost, as it was deemed inefficient to have Customs assess each package, then store it while they issued a demand for payment, reconcile the payments received, and ultimately release the package back into the delivery system for the less than AU$100.00 of GST that they could collect.

    Ultimately the major retail chains in Aus (largely price gougers) complained enough to the government about the sales they were loosing to personal imports to get the government to change the legislation/regulations. They now require any offshore organisation shipping more than AU$75,000 (landed) p.a. of goods into Australia to be registered to collect and remit GST to the Aus government. They still allow an exemption for offshore organisations or individuals shipping less than AU$75,000 p.a. The message quoted in the first post presumably comes from a seller who believes that they will not reach the AU$75K threshold shipped to Aus in any financial year, and are hence eligible to claim an exemption from collecting GST for our government.

    There is also an exemption from collecting GST if you operate a small business (maybe as a hobby), and turnover less than $75,000 pa in that business. However, since you do not collect GST from the customers of the business and remit it to the government, you cannot claim a rebate for the GST paid on inputs to the business either. As you pointed out, you can claim the expenses against income for income or company tax purposes, but they are completely separate tax systems to the GST system.

    Some items can be deductable for assessing income tax in Australia, but these are generally limited to items that a worker needs to supply and maintain to safely and effectively earn their income, or the cost of travelling between jobs if they have multiple jobs. The Tax Department has lists of acceptable deductable items and amounts for virtually every job classification in the country, and claiming outside those lists tends to lead to a tax audit.

    Similarly, the company tax system also has a lot of twists, turns and limitations on deductions that can be included when preparing a Company Tax return. Most certainly,
    I used to be an engineer, I'm not an engineer any more, but on the really good days I can remember when I was.

  6. #6
    Join Date
    Sep 2012
    Location
    North Yorkshire UK
    Posts
    2,682

    Default

    Hi Malb,

    Thankyou for that information. It seems that the Au tax system has a number of important differences compared to us in the UK.

    Our GST is like the UK's VAT, a tax based on turnover rather than income (wages, salary, interest earned, rent received etc) or profits (company tax). The primary difference is that with GST or VAT, the government aims to tax the entire turnover of a business, then taxes the income of an individual or profit of a company.
    Its a subtle difference, but if you are registered for VAT, you can claim it back on a quarterly basis, However it is not included in turnover. If your annual turnover is less than the amount required for registration of VAT, you can include the VAT you have paid against profit before other taxes.

    I believe that the amount that you can import free of tax/duty here is 1000. Above that amount both tax and duty are charged. I don't know what changes are going to occur after Brexit other than its going to cost Joe public one way or another.
    Best Regards:
    Baron J.

  7. #7
    Join Date
    Feb 2013
    Location
    Laidley, SE Qld
    Posts
    843

    Default

    As RC says, there is absolutely no obligation on overseas sellers or shippers to collect GST on behalf of the Australian gummint. Those that do, (I know that aliexpress and shipito do) presumably do so because it suits their commercial interests, i.e. they get a sling out of the 10% to make it more than worth their while.

    There was an article in the press 2 or 3 weeks ago stating that adding 10% to small imports has done nothing to improve the trading conditions of Australian businesses. Thanks for nothing Gerry Harvey.

    There is a possibility but not a certainty that goods purchased from the the site mentioned by the OP (or similar sites) will get pinged 10% by Australia Post when they land here.

  8. #8
    Join Date
    Oct 2015
    Location
    melbourne
    Posts
    270

    Default

    Nope, no collection of gst from purchasers for low value imports.

    It is collected via customs for goods over $1000.

    I suppose 'they' may collect stats on low value 'exporters' to decide if any of them should be 'requested' to comply.
    Maybe some of the trade agreements would provide a legal mechanism to enforce.


    Russ

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