Residents and non-residents have different tax rates.
- A taxpayer who is a resident of Australia for income tax purposes is liable to tax on a worldwide income.
- Non-residents are liable to tax only on income derived from Australian sources.
Whether you are a resident or non-resident of Australia for income tax purposes depends on your business entity.
Good and services Tax (GST) on services and digital products
As of July 2017, you must register for GST if you're an overseas business importing services and digital products to Australian consumers and make over A$75,000. This includes:
- digital products such as streaming or downloading of movies, apps, games and e-books
- imported services such as architectural or legal services.
Head to the Australian Taxation Office's (ATO) website for more on GST on imported services and digital products.
GST on low value imported goods
From 1 July 2018, you'll need to register for GST if you're an overseas business making over A$75,000 and sell low value imported goods to Australian consumers. This will affect goods valued at A$1000 or less on items like:
- electric appliances.
You can find more about GST on low value imported goods on the ATO website.
Value Added Tax (VAT) for European Union based businesses
As of 1 January 2015, there have been changes to the way that VAT is charged for European Union (EU) based businesses.
This change applies to businesses that supply:
- telecommunications (e.g. SMS, phone, internet access)
- broadcasting (e.g. television, radio)
- electronic services (e.g. software downloads, cloud business online gaming, e-learning, online payment services).
EU based businesses
Previously, VAT was charged according to where the supplier was based. As of 1 January 2015, for trade from one EU nation to another, VAT is charged according to where the customer is based.
Non-EU based businesses
If you're a non-EU business but supply to customers in the EU, there are no changes to the rules. Current rules already charge VAT according to where the customer is located. This means exports direct from Australia to the EU will not be affected by the changes.
What to do...
- See the Australian Taxation Office's (ATO's) International Tax section for information on tax issues for resident and non-residents.
- Check out the Changes to VAT in the European Union page on the Austrade website.
- Visit the European Union Taxation and Customs Union website for more on the changes to the VAT.