Registration for Goods and Services Tax (GST) in Australia is not mandatory for all businesses or enterprises. However, failing to register when required can lead to penalties.
The following information outlines the circumstances under which GST registration is necessary and the associated requirements.
GST turnover threshold
You must register for GST when your business or enterprise reaches or exceeds a GST turnover of $75,000 or more. The GST turnover refers to the gross income from all businesses minus the GST.
New Business Expecting to Reach Threshold
If you are starting a new business and anticipate that your turnover will reach the GST threshold (or more) within the first year of operation, you must register for GST.
Existing Business Reaching Threshold
If you are already in business and your turnover has reached the GST threshold of $75,000 or more, you must register for GST.
GST registration is mandatory for non-profit organizations if the annual GST turnover amounts to $150,000 or more.
Taxi or Limousine Services
Regardless of your GST turnover, you must register for GST if you provide taxi or limousine travel services (including ride-sourcing), both as an owner-driver or through leasing or renting a taxi.
Fuel Tax Credits
If you wish to claim fuel tax credits for your business or enterprise, you must register for GST. Thus, the registration for GST is optional for businesses or enterprises that do not fall under any of the above categories.
However, if you choose to register, you generally must remain registered for at least 12 months.
If you are not registered for GST, it is important to monitor your monthly turnover to determine whether you have reached or are likely to exceed the threshold. If your GST turnover surpasses the relevant threshold, you must register within 21 days.
Calculating your GST turnover
Your GST turnover is your total business income less:
- GST included in sales to your customers
- sales to associates that aren’t for payment and aren’t taxable
- sales not connected with an enterprise you run
- input-taxed sales you make
- sales not connected with Australia.
GST turnover threshold
You reach the GST turnover threshold if either:
your current GST turnover – (your turnover for the current month and the previous 11 months – totals $75,000 or more ($150,000 or more for non profit organisations)
your projected GST turnover – your total turnover for the current month and the next 11 months – is likely to be $75,000 or more ($150,000 or more for non profit organisations).
Using a business software package to account for sales and expenses may make this easier.
When working out your projected GST turnover don’t include:
- amounts you receive for the sale of a business asset such as the sale of a capital asset
- any sale you make, or are likely to make, solely as a consequence of ceasing to carry on an enterprise, or substantially and permanently reducing the size or scale of an enterprise.
Even if your current GST turnover is at or above the GST turnover threshold, you don’t have to register for GST if your projected GST turnover will be less than the threshold.
When To Register For GST if Non Resident
The registration requirements for GST are quite similar for Non Resident entities and residents regarding the GST turnover threshold. The GST turnover for Non Residents includes the total value of imported services, digital products sold to Australian consumers, and low-value imported goods sold to consumers.
However, it’s worth noting that if these sales are made exclusively through an online marketplace or electronic distribution platform, Non Residents may not be obligated to register for GST.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.