GST on imported services and digital products sold to Australian Consumers

From 1 July 2017, supply of services, digital products or rights to Australian consumers by a non-resident supplier will attract GST.

Who will be impacted?

  • An overseas-based supplier making supplies of services, digital products or rights to Australian consumers that use or enjoy those supplies in Australia.
  • Operators of ‘Electronic Distribution Platforms’ (EDPs), where the EDP operator will be treated as having made the digital supplies that are supplied by merchants through the EDP. In these circumstances, the GST liability will fall on the EDP operator, rather than the merchant.

Who are Australian Consumers?

  • An Australian resident not registered for GST;
  • A GST registered entity registered but did not acquire the Goods or Services for their business (solely or partly).

How to identify Australian Consumers?

Suppliers must typically rely on the information provided by the customers, however to protect the suppliers from any misdeclaration of information, the ruling provides that a supplier is not liable for GST if they have satisfied evidentiary requirements, and reasonably believe that the recipient is not an Australian consumer, based on:

  • reasonable steps to obtain information concerning the status of the recipient; (e.g. profile address, billing address, and IP location, ABN, etc.) or
  • business systems and processes that provide a reasonable basis for identifying the status of the recipient.

Registration for GST

Non-resident suppliers will be required to register for GST if their turnover exceeds AUD 75,000 (AUD 150,00 for non-profits). They may elect to register as a “limited registration entity” with the following features:

  • Registration will be online, and will be available from 26 June 2017
  • register via an electronic portal on the ATO website
  • Documentary requirements for registration will be minimal
  • Registrants will be provided with a 12-digit ATO Reference Number (ARN) as the unique numerical identifier in lieu of an ABN
  • Taxpayers under the simplified registration system will only need to lodge a new, simplified Business Activity Statement (BAS) quarterly through the new electronic portal
  • The simplified BAS will contain only two items: Total taxable supplies and GST payable
  • Taxpayers under the simplified registration system will not be able to claim input tax credits
  • Not required to issue tax invoice