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Dropshipping Internationally and to Australia (and having another Australian based business)

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Newbie

Views 814

Replies 3

Hi all,

This is my first question here. Thank you for all your kind efforts and help, in advance.

 

I am starting a new dropshipping-based online store and I need to be clear about all tax related matters before I launch it and to make sure I set the pricing right from the beginning.

 

My supplier is in China and I would be selling to anywhere in the world including Australia.

 

I don't expect to have a turnover of A$ 75000 or more in my first year and thus I understand I don't need to register for GST.

I don't have an ABN for this particular business.

I do have an ABN for a service-type business based in Australia and am setting it up to start soon too.  I'm not registered for GST for this one either.

 

My questions regarding the dropshipping business are:

 

1. Do I need to have a separate ABN for it ? or at all ?

2. My understanding is that I don't need to register for GST till my turnover is A$ 75000 or more (or expect it to be so in the coming 12 months). 

  • a.  Is that correct ?
  • b.  When saying that turnover, it means only from the sales I make (dropshipping) to Australian residents. Correct ?
  • c.  Would the turnover calculated as from my two businesses combined or would each business have separate entity alltogether ?
  • d. As long as I am not yet registered for GST, I then don't need to charge my Australian clients for GST on dropshipped goods. Correct ?

3.  Would my overall income from my dropshipping business all be taxable ? or is it just the part from selling to Australian residents ?

4.  One last question please, what if I also have an Australian based dropship supplier, vs the China based one  ?

 

I really appreciate any clarification and any further tips you may kindly think I need to be aware of.

 

Thanks so much

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions
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Most helpful response

Taxicorn

Replies 2

@A4AUS 

 

(1) You use the same ABN for all businesses.

(2)

a. Yes

b. Incorrect.

c. Your turnover from all ABN sales needs to be more than $75,000 

d. Correct because you are not registered for GST, so you can't charge it for Australian Based customers, until you are.

 

(3) All would be taxable income.

 

(4) No difference whatsoever, you are taxed on your worldwide income.

 

 

3 REPLIES 3
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Most helpful response

Taxicorn

Replies 2

@A4AUS 

 

(1) You use the same ABN for all businesses.

(2)

a. Yes

b. Incorrect.

c. Your turnover from all ABN sales needs to be more than $75,000 

d. Correct because you are not registered for GST, so you can't charge it for Australian Based customers, until you are.

 

(3) All would be taxable income.

 

(4) No difference whatsoever, you are taxed on your worldwide income.

 

 

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Newbie

Replies 1

It's been a while since this thread was active but I am in a similar situation and I am wondering how it is with import taxes? I can't imagine that you can import something (value under 1000$) and you don't have to pay import tax or gst. That would be to easy wouldn't it be? 

 

Another question on top: My products will get produces in Germany and they charge me Vat now I wonder if I can claim this back? 

 

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Community Support

Replies 0

Hi @unknown89

 

If you're registered for GST then as an Australian retailer you should treat these sales the same as other domestic sales and apply GST at the point of sale.

 

You must register for GST if your turnover is $75,000 or more in a 12-month period.

 

The Australian Border Force has information about import taxes.

 

Also take a look at business deductions you can claim on our website.

 

Ari