Episode 27 - The Tax and Compliance Consequences of Launching in Australia
INTERVIEW WITH TYLER WISE
On this episode of the Ecommerce Braintrust podcast, we are covering a very informative topic as a response to the multitude of questions we’ve received about the tax and compliance consequences of launching in Australia.
As a native Aussie herself, Kiri observed a different e-commerce landscape in Australia compared to the US. eBay is the first choice marketplace, as Amazon Australia just launched about a year ago. Australians are consumers with high disposable incomes, and the country has become an attractive place for US companies. So, what do you need to know if you foresee an Australian launch in your company’s future?
Our guest today is Tyler Wise, Director of Wise Accounting and a professional that focuses on commercial accounting and business analysis. If you’re looking to become a seller in the Australian marketplace, then Tyler can help you understand the ins and outs of launching there to determine if this is a strategic opportunity for you. Tax laws and compliance are not the same in Australia as in the US, so if you’d like to learn more about this topic, tune in today!
The recent change in tax laws concerning the GST (goods and services tax) covers items over $1000 from foreign sellers in an effort to “level the playing field” and allow Australian sellers to be more competitive.
Tyler explains the four requirements that have to apply before GST must be applied by the Australian seller:
An offshore transaction (goods brought into Australia)
The goods’ value is under $1000 (if the value exceeds $1000, then the old rules apply)
The supplier has to have a turnover (revenue) of over $75,000/yearly
The service needs to be a non-business transaction
Why your website or advertising needs to disclose that prices include GST, to let consumers know up-front
Why Australian companies will have an ABN (Australian business number), and non-Australian companies have to register and get a GST ID number
If you anticipate revenue exceeding $75,000 yearly, then you need to charge GST and remit that money
There is a 21-day grace period if you fall behind, but there are big fees to pay if you fail to stay up-to-date with GST
What does a non-Australian company need to do to sell products on Amazon Australia?
Get a GST number
Complete quarterly activity statements
Tyler’s take on when it makes sense for an international entity to set up an Australian corporation
If you set up a corporation in Australia, then you’re eligible for GST credits from that point forward
How the system prevents someone from “getting around” the GST by simply creating multiple entities
The full suite of compliance and business analysis services offered by Wise Accounting