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eCommerce sales taxes when exporting from Australia

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Newbie

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I'm currently creating an online store with manufacturing and shipping to be done in the Unite States, with majority of distribution being within US and occassionally internationally to other countries such as the ones in EU.

My concern is that I will be operating the business in Australia, and I'm currently not exactly sure as to how the GST (or Sales Tax/VAT for EU) should be included for my type of business.

Will the taxes on my products need to be included on top of my labelled price, and will the percentage of this be based on where my inventories are located and shipped from, or based on the delivery locations (customers') such as in EU's VAT, or my location where I will operate and manage the business?

 

I understand it depends on the NEXUS, but am just unsure which my type of business will be considered for.

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ATO Certified

Devotee

Replies 2

Hi @James7,

 

Thanks for your post! As you're operating the business in Australia, intangible supplies (digital supplies) that you make through that business will be connected with Australia. However, if you make your supply to customers in US and other overseas countries, the supply will be GST-free as the overseas customers are not in Australia when the supply is made.

 

If you make a supply of goods that are manufactured in US to US and overseas customers, the supply of goods is not connected with Australia as the goods are not delivered or made available in Australia. As the supply of goods is not connected with Australia, you are not making a taxable supply and you are not liable for GST.

 

Please note that this information is general in nature, and if your circumstances change you may need to request updated advice from us. You can contact our early engagement team for more detailed advice on how we think tax law applies to your situation in the future.

 

Thanks!

3 REPLIES 3
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Best answer

ATO Certified

Devotee

Replies 2

Hi @James7,

 

Thanks for your post! As you're operating the business in Australia, intangible supplies (digital supplies) that you make through that business will be connected with Australia. However, if you make your supply to customers in US and other overseas countries, the supply will be GST-free as the overseas customers are not in Australia when the supply is made.

 

If you make a supply of goods that are manufactured in US to US and overseas customers, the supply of goods is not connected with Australia as the goods are not delivered or made available in Australia. As the supply of goods is not connected with Australia, you are not making a taxable supply and you are not liable for GST.

 

Please note that this information is general in nature, and if your circumstances change you may need to request updated advice from us. You can contact our early engagement team for more detailed advice on how we think tax law applies to your situation in the future.

 

Thanks!

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I'm new

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AmandaE and JodieH, your responses are helpful here. 

Just an additional question to clarify - 

If supply and production of goods is overseas (US or UK) and some customers are also from Australia as well as UK and US, should there be any GST applied for the Australian customers only?

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Community Manager

Replies 0

Hi @R2,

 

Sounds like you are making taxable sales to customers in Australia.

 

Check out the information on taxable sales.

 

KylieS