GST on IT Consulting and Software Developer activities to overseas client?

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okokahha · Answer

In Australia, GST on exports of services generally follows the GST-free (zero-rated) rule, meaning you usually don't need to charge GST when providing consulting and software development services to overseas clients. However, there are a few key considerations: 1. GST on Exports of Services - If your client is overseas and the service is delivered to them outside of Australia, it is typically GST-free. - Since you're improving their sales/service cloud software, the key factor is who benefits from the service-if the primary recipient is overseas, GST likely does not apply. 2. Does Your Client Have a Presence in Australia? - You mentioned the client has an ABN and sells products in Australia. If they have a permanent business presence (e.g., employees or offices in Australia), then some services might be taxable. - If the software is mainly used by employees within Australia, the ATO might consider it a service consumed in Australia, which could make it subject to GST. 3. ATO Ruling & Next Steps - The ATO (Australian Taxation Office) has guidelines on GST-free exports of services-you may want to check with a tax professional or consult ATO's rulings (GSTR 2000/31) to confirm your specific case. - If in doubt, you can also apply for a private ruling from the ATO to clarify your GST obligations for this client. Since international tax matters can be complex, it's always best to double-check with an accountant.

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