Did you know that products and services sold in Australia are required to have an additional tax of ten per cent? This applies to almost all items except for those from the food, housing, and healthcare industries. This tax is known as the Goods and Services Tax (GST), obtained by businesses and turned over to the government, particularly to the Australian Taxation Office (ATO). Collected taxes will then be utilised for public services and infrastructure for different states across the country.
It’s important to understand that GST applies to imported goods as well. For this reason, if you are an Amazon seller in Australia, your e-commerce business will likely be impacted by this tax. In this article, we will share what you need to know about the Australian GST requirements for Amazon sellers.
Australia’s GST requirements for sold Amazon products
The 10 per cent GST applies to all imported goods, including items shipped to Australia via Amazon. Take note that this only covers Low-Value Imported Goods (LVIG) with a customs value of AU$1000 or less. If the customs value of goods is more than AU$1000, the tax imposed will be processed right at the border.
Based on this legislation, it is Amazon’s responsibility to calculate, collect, and remit the GST for every LVIGs sold on the platform. This means that when a customer places an order with an Australian delivery address, the GST will be automatically applied. It will then be reflected on every taxable item and added to the total amount of the purchased items.
The impact of Australian GST on a seller’s account
It’s vital to get well-acquainted with the Australian GST requirements if you’re an Amazon seller so that you know what to expect when selling goods or services to customers in Australia. It’s better if you understand the GST calculation on LVIGs, so you and your customers won’t get caught off guard when pursuing business transactions. At the same time, keep in mind that some terms and conditions apply to both Fulfilled by Amazon and Merchant Fulfilled Network sellers, while others apply to either one.
Ultimately, it’s best to know and understand the tax prerequisites, such as the GST requirements, set forth by Amazon Australia. If it helps, get an accountant for Amazon sellers in Australia who can help you out, such as the experts at The ECommerce Accountant!
How the tax payment process goes for Amazon sellers
If you’re wondering how the whole process entails, first, your items in your inventory considered to be LVIGs will automatically be calculated. When a customer buys them, the tax will then be included in the total amount. It is then Amazon itself that will collect the tax and remit it to ATO. In the end, the government will allocate the collected funds to various projects and public services in the country.
Furthermore, as an Amazon seller, you must ensure that you’re entering the accurate address for shipping. This is because entering false information regarding the location is not acceptable, as Amazon will terminate your Seller Account.
At this point, you now know what the Australian GST entails for Amazon sellers. Be sure to consider all the valuable information discussed above so that you will be properly guided when selling goods or services to customers in The Land Down Under. Ultimately, doing so will help your e-commerce business navigate through and thrive in the Australian market!
Are you an Amazon seller looking to understand the Australian GST for your e-commerce business? You’ve come to the right place, as we provide e-commerce accounting services to help entrepreneurs reduce tax and increase profit. If you need the knowledge and expertise of an e-commerce tax accountant, get in touch with us today to book your FREE strategy session!