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14newbie(Newbie)Newbie
28 Feb 2024

Hi! I am starting an online business through Shopify where I plan to sell digital products/courses/books etc. I am based in Australia, and I have an ABN that I saved in my Shopify store. I have also registered for GST. But once I start to get income, I imagine people would buy these digital products worldwide, not just in Australia. I have the following questions on how would tax and GST work for me:


  1. There is an option to collect taxes on the Shopify website and select the relevant country - do I just collect taxes from Australian customers? Cause I couldn't possibly know who in the world would buy my digital products. Does that mean I am collecting GST amount from Australian customers?
  2. If that's the case, then do I do the BAS report as follows:
  • G1 Total sales - total business sales income from selling products online to people around the world.
  • 1A GST on sales - GST collected from customers in Australia
  • 1B GST on purchases. - Any GST I have paid for business-related income? What if the online receipts don't mention the GST amount?
  1. How does the tax return work? Do I just report the total business, employment and other income in my tax return?
  2. Is saving my ABN details in the shopify website be good enough as that would then save my ABN number in my online receipts to customer? or is that not a requirement?
  3. Anything else that I need to worry about selling products online?

3,463 views
4 replies
3,463 views
4 replies

Most helpful response

Most helpful reply

AnitaATO(Community Support)Community Support
4 Mar 2024

Hey @14newbie,


1. I think you're pretty much all over it and have done your research. Yes, if you're selling to Australian customers then GST will be included. Selling the products to someone outside of Australia is generally GST free.


2. It appears you know exactly what you'll need report on your BAS in each label. If a receipt doesn't show GST or doesn't say GST inclusive, then there hasn't been any GST charged and there won't be any to claim.


3. Tax returns will work pretty much exactly as you've mentioned. You'll report any income from Shopify, your employment and any other income all on the one tax return assuming you have a sole trader ABN.


4. You may need to speak with Shopify about saving your ABN and how that works with your invoices.

All replies

Most helpful reply

AnitaATO(Community Support)Community Support
4 Mar 2024

Hey @14newbie,


1. I think you're pretty much all over it and have done your research. Yes, if you're selling to Australian customers then GST will be included. Selling the products to someone outside of Australia is generally GST free.


2. It appears you know exactly what you'll need report on your BAS in each label. If a receipt doesn't show GST or doesn't say GST inclusive, then there hasn't been any GST charged and there won't be any to claim.


3. Tax returns will work pretty much exactly as you've mentioned. You'll report any income from Shopify, your employment and any other income all on the one tax return assuming you have a sole trader ABN.


4. You may need to speak with Shopify about saving your ABN and how that works with your invoices.

Liked by 14newbie
Adrian12345(Newbie)Newbie
13 July 2024

Hi,


I’ve recently started a jewellery Shopify business as a side hustle, with my main income source being my casual job. I have a few additional questions and clarifications:


1. Does the GST and tax collection approach you mentioned apply to physical products as well, or is it specific to digital products?

2. I have purchased several business-related items such as courses, inventory, and advertising. Can I reduce the tax I pay by claiming these business expenses? If so, what is the process for doing this correctly?

3. I started my business in February 2024 and initially did not add an ABN to my Shopify store or inform the ATO about it. Are there specific steps I need to take now to ensure everything is compliant with the ATO requirements?


Thank you in advance for your assistance.


Best regards,

Adrian

TamaraATO(Community Support)Community Support
17 July 2024

Hello @Adrian12345


For Q1, Yes, this applies to both for dealings internationally.


For Q2, We've got a great article on our community pages with Tax Tips for managing your side hustle.

This includes links to how to claim deductions and what to declare as income.


For Q3, You've already applied for your ABN and registered for GST, as long as you keep up to date with your activity statements. You're on track.

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How does tax and GST work for selling digital products on shopify? | ATO Community