Selling across the ditch – GST on low value goods


On 16 February, the Australian government introduced draft legislation to impose GST on low value goods imported by Australian consumers. Currently, imported goods with a customs value of A$1,000 or less (“low value imported goods”) are not subject to collection of Australian GST.

From 1 July 2017, non-resident sellers of low value imported goods will have to register and charge GST to non-GST registered Australian customers, if their total Australian sales are A$75,000 or more annually. In some situations, operators of electronic marketplaces and entities that assist Australian consumers to acquire goods from overseas (so-called “re-deliverers”) will be deemed to make the supply and will thus become liable to account for the GST.

If this sounds like a slice of your business, you will be required to register for Australian GST, charging Australian GST (currently 10%) and remitting it to the Australian tax system. This applies whether your customers purchase goods from you online, over the phone or in person in a retail outlet here where your business ships the goods over to Australia. It applies whether the goods are physically here in New Zealand or sourced elsewhere overseas.

For New Zealand businesses exporting low value goods to Australia, the Australian Taxation Office (ATO) is talking about a GST registration process whereby you elect to be a ‘limited registration entity’ and return GST that way.

Along with registering for GST, you will need to look at how your software and record systems are set up and rethink your pricing and marketing.

The Bill hasn’t been passed yet but it looks as if it will. So, if you sell low value goods to Australia and your GST turnover of low value goods sold into Australia is over or close to $75,000, please contact us to talk about how this might affect your business.