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_DomainReseller(Newbie)Newbie
26 July 2021

Dear ATO,

I’m considering starting an online business.

I have searched the ATO’s website and wasn’t able to get a clear answer.

I would be a reseller of products such as Domain names, web hosting and email plans via a Domain Registrar (Godaddy) that is based in the USA. I would, hopefully have customers from Australia and other countries. My question is, do I need to charge GST on sales to Australian customers and foreign ones?

I would be purchasing a Reseller program from them (Godaddy) to re sell their products under my own white labeled brand. I am based in Australia.

According to their terms and conditions I would be an agent of theirs. https://au.godaddy.com/legal/agreements/reseller-agreement (see clause 5.9)

Although the link mentions Australia, they are based in the USA.

I understand that the GST threshold is $75,000 but I anticipate that I will only make..if I make anything, a profit of possibly a couple of thousand $ if that.

I also did a test run to check their services by purchasing a domain name from a Godaddy reseller https://shop.worldtarget.com who are also based in the USA and they charged me GST which makes me wonder if Godaddy or Wild West Domains (which is owned by Godaddy) has some sort of blanket coverage with regards to Australian Tax laws.

So saying that. I’m really confused. My apologies for this long winded query but I just want to do the right thing.

Any information would be greatly appreciated.

Regards

3,204 views
2 replies
3,204 views
2 replies

Most helpful response

Most helpful replyATO Certified Response

TonyATO(Community Support)Community Support
ATO Certified Response27 July 2021

Hello @DomainReseller

The first thing to do is work out if you need to register for GST or not.

It sounds like you probably don't need to register, but just remember the registration threshold of $75,000 is based on your total business income, not your profit.

If you're not required to register, you don't need to charge GST to anyone.

If you're required to register or you decide to voluntarily register, you will need to charge GST to your Australian customers, but exports of goods or services are generally GST-free.

As mentioned above, you can voluntarily register for GST if you want to claim GST credits, but once registered you must charge GST to Australian customers, even if your turnover is below $75,000.

Foreign businesses need to register and charge GST if their sales connected with Australia are $75,000 or more, so this is likely why they charged you GST.

I hope this makes sense.

All the best.

:)

All replies

Most helpful replyATO Certified Response

TonyATO(Community Support)Community Support
ATO Certified Response27 July 2021

Hello @DomainReseller

The first thing to do is work out if you need to register for GST or not.

It sounds like you probably don't need to register, but just remember the registration threshold of $75,000 is based on your total business income, not your profit.

If you're not required to register, you don't need to charge GST to anyone.

If you're required to register or you decide to voluntarily register, you will need to charge GST to your Australian customers, but exports of goods or services are generally GST-free.

As mentioned above, you can voluntarily register for GST if you want to claim GST credits, but once registered you must charge GST to Australian customers, even if your turnover is below $75,000.

Foreign businesses need to register and charge GST if their sales connected with Australia are $75,000 or more, so this is likely why they charged you GST.

I hope this makes sense.

All the best.

:)

Liked by _DomainReseller
_DomainReseller(Newbie)Newbie
27 July 2021

Hi Tony,

Thanks so much for the reply and info, you have explained this brilliantly. I really appreciate it.

I also spoke with GoDaddy last night about it and they said they are responsible/ have to charge the GST.

Cheers mate!!!

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