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Taxqueries75(Newbie)Newbie
5 Dec 2024

Hi,

I need some help with a question about reverse charge GST in Australia.


I’m GST-registered in Australia and purchased IT services from a Japanese company. Their invoice included Japan’s consumption tax, with the breakdown as follows:

  • Net amount: $100
  • Consumption tax (10%): $10
  • Total paid (gross): $110

Could you clarify how I should handle this under Australian GST rules?

  1. Should I apply the reverse charge to the gross amount of $110 (including the Japanese consumption tax)?
  2. Or should I apply the reverse charge only to the net amount of $100 (excluding the Japanese consumption tax)?
  3. Alternatively, since the Japanese consumption tax was already applied, do I skip the reverse charge altogether?

I’d appreciate your guidance on how to proceed.

370 views
2 replies
370 views
2 replies

Most helpful response

Most helpful replyATO Certified Response

KylieATO(Community Support)Community Support
ATO Certified Response19 Dec 2024

Hi @Taxqueries75,


If the amount included in the invoice to you by your supplier is Japanese consumption tax (and not Australian GST), then, the ATO is not able to advise you on Japanese tax rules and it would be advisable to refer back to your supplier.

 

You can only claim Australian GST in your BAS (if the acquisition of the service was for your business and other requirements are satisfied).

             

There are limited circumstances under which ‘reverse charge’ is required by Australian GST registered entities for Australian GST.

There are also instances where non-resident businesses are required to be registered for Australian GST and charge GST to Australian consumers for imported services such as IT services.

All replies

PollyATO(Community Support)Community Support
16 Dec 2024

Hi there @Taxqueries75,


We've reached out to our GST tech team and should have a repsonse for you shortly.

Most helpful replyATO Certified Response

KylieATO(Community Support)Community Support
ATO Certified Response19 Dec 2024

Hi @Taxqueries75,


If the amount included in the invoice to you by your supplier is Japanese consumption tax (and not Australian GST), then, the ATO is not able to advise you on Japanese tax rules and it would be advisable to refer back to your supplier.

 

You can only claim Australian GST in your BAS (if the acquisition of the service was for your business and other requirements are satisfied).

             

There are limited circumstances under which ‘reverse charge’ is required by Australian GST registered entities for Australian GST.

There are also instances where non-resident businesses are required to be registered for Australian GST and charge GST to Australian consumers for imported services such as IT services.

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