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If you are running a business in Australia, you’re likely familiar with GST.
If not, here’s a breakdown of what you need to know:
What is GST?
What is GST?
GST stands for Goods and Services Tax, a 10% tax charged on most goods and services in Australia.
The government collects this tax to fund public services like schools, hospitals and infrastructure.
Both individuals and businesses may need to register for GST.
How does GST work?
How does GST work?
GST is collected by businesses on behalf of the government and is typically included in the price of goods and services.
Certain items are exempt from GST, meaning they are “tax free”
These include; basic food, some education materials, medical services, some medicines and healthcare services.
When do you need to register for GST?
When do you need to register for GST?
In general, you must register if any of the following apply to your business.
Your annual turnover exceeds $75,000. This is the most common threshold for GST registration. Turnover refers to your total income from sales.
Your not-for-profit organisation has a revenue of over $150,000.
You provide a taxi or rideshare service, regardless of your turnover.
Is GST registration optional?
Is GST registration optional?
If your turnover is below the $75,000 threshold, GST registration is optional.
However, if you exceed this threshold, you must register for GST within 21 days.
Can businesses claim GST?
Can businesses claim GST?
Yes, businesses can claim back the GST they have paid on their purchases. This is done through the Australia Taxation Office (ATO)
How do I report the GST I have collected or paid?
How do I report the GST I have collected or paid?
In Australia, businesses report their GST obligations through a Business Activity Statement (BAS). The BAS is a document that businesses use to report and pay various taxes to the ATO, including GST, Pay As You Go (PAYG) withholding, PAYG instalments and Fringe Benefits Tax (FBT).
The BAS helps businesses report their tax obligations and ensure they comply with tax laws. It is usually submitted on a monthly or quarterly basis, depending on the business's turnover, and can be filed online through the ATO's portal or via a registered tax agent.
You can use the GST calculator on the Money Smart website to work out how much GST is on a certain sale.
If you're unsure about your GST registration or need advice tailored to your business, feel free to contact the team at DS Financial Partners!
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