Ask the Experts

PwC Partner Eugen Trombitas – February 2016

Someone wants to buy my product in Australia but doesn’t want to be the importer. Can I register for GST in Australia without setting up an Australian company?

An entity or a person can register for GST in Australia as long as they are carrying on as a business.

In Australian GST law this is called an ‘Enterprise”. The business can be carried on either in Australia or overseas, so there is no strict requirement to set up an Australian company to register for GST.

The New Zealand entity or person can then be the importer and will need to pay GST on the import (assuming it is a taxable import) at the time the product is imported.

If the entity is registered for Australian GST and makes the importation for a “creditable purpose” (that is, sells products that are subject to Australian GST), it can recover the GST incurred as an input tax deduction when filing its periodic GST return.

In Australia this is referred to as a Business Activity Statement or BAS.

There is an alternative approach: the entity can, subject to meeting certain requirements, apply for and register for the Australian GST deferral scheme.

In simple terms, this can give GST cashflow relief when importing products into Australia.

While the majority of New Zealanders are familiar with aspects of our GST system, there are key differences between our GST system and that of our Trans-Tasman neighbour.

First, in New Zealand GST is a value added tax of 15 per cent on all goods, services and other items sold or consumed here, as well as most imported goods and certain imported services.

There are some exemptions such as rents from residential rental properties and financial services.

In Australia GST is a broad based consumption tax and is applied to most goods and services, with some exceptions.

It is currently set at 10 per cent of the price of goods and services where GST is appropriate.

The thresholds for paying GST also differs across both countries.

Entities and individuals in New Zealand must pay GST when annual turnover exceeds $60,000 in any 12 month period.

Across the Tasman, a business with a turnover of A$75,000 ($80,775) or more per year, or a non-profit organisation with a minimum annual GST turnover of $150,000, are liable for GST.

Exports of goods and services from Australia are generally GST-free.

So if you are registered for GST in Australia you do not need to include this tax in the price of your exports; however you can still claim credits for the GST from the purchases required to make the exported goods and services.

In addition, some items in Australia are excluded from GST, notably salaries, wages, and fresh unprocessed food – the latter which has received much public debate on our side of the Tasman.

Other goods and services in Australia, such as rental income and financial services, are “input-taxed”, which means their sale is GST-exempt but GST paid by that part of the business cannot be claimed as an input tax credit.

As published by Fairfax in February 2016.

Talk to us

Eugen Trombitas

Partner | Auckland
T: +64 9 355 8686
E: eugen.x.trombitas@nz.pwc.com
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