- July 25, 2019
If you are planing to sell goods or services into Australia, you may need to consider the taxation consequences. Your residency status may affect your tax obligations. For example, you are selling from a treaty country such as the USA, UK, China, etc.
What are tax treaties?
Tax treaties are formal bilateral agreements between two countries. Australia has tax treaties with more than 40 countries, such as Argentina, Austria, Belgium, Canada, Chile, China, Denmark, Fiji, Finland, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Kiribati, Korea, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Romania, Russia etc
Selling from a treaty country without a physical presence in Australia
- If you are a resident entity of a country that has a tax treaty with Australia
- you export goods to Australia without having a physical presence in Australia, such as an agent, subsidiary or permanent establishment, and
- you don’t employ staff in Australia.
If above applies, you will have the following tax obligations:
- Income tax – You will not be liable to pay Australian income tax. It only applies if you have an Australian permanent establishment.
- Capital gains tax (CGT) – You will not be liable to pay CGT. CGT only applies to assets that are taxable Australian assets.
- Goods and services tax (GST) – You may be liable for GST. GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
- Superannuation, PAYG withholding and fringe benefits tax (FBT) – As you don’t have employees, you will not have any of these obligations.
- Other tax obligations – If you are exporting goods to Australia by selling to an Australian resident entity on a free on board (FOB) basis, this may be considered an importation by the Australian entity. This means you may not have any Australian tax obligations – rather, your Australian customer will have tax obligations relating to the importation.
You will need to register for an Australian Business number (ABN).
However, if you are selling from a non-treaty country without a physical presence in Australia. You may be liable to pay income tax and GST. Please refer ATO website for more details. (Source: ATO)
If you require any assistance on selling goods or services into Australia, please contact our Business Mantra experts on (08) 9242 3555 or email us at firstname.lastname@example.org. We shall be glad to serve you.