Register for goods and services tax (GST)

If you’ve started a new business, you should register if you expect your GST turnover to reach $75,000 in the first year.

You have to register for GST within 21 days of becoming aware that your GST turnover will go over the threshold. It's a good idea to check each month to make sure you're not likely to go over the limit.

If your GST turnover is below the $75,000 threshold, you may choose to register. But if you do, regardless of your turnover, you must:

• include GST in the price of most goods and services you sell
• claim GST credits for most business purchases you make
• lodge activity statements to report your total sales, GST on sales and GST credits

GST turnover is your business income (excluding certain sales), not your profit.

Say you run an online clothing store. If you sell $80,000 worth of clothes in a year, you’d have to register for GST. This is because your GST turnover is over the $75,000 threshold – even if you only make $40,000 in profit.

Head to the ATO website to work out your GST turnover.

You might be able to claim GST money back from the ATO.

If you’re registered for GST, you can generally claim back any GST included in the price of things you've bought for your business. These are GST credits.

If, for any tax period, your GST credits are higher than the amount of GST your business has to pay the ATO, you could get a refund.

Find out more on the ATO web page claiming GST credits.

Example

Laura runs an accountancy firm and has just bought a new computer for the office. The computer cost Laura $1100, including GST. Because GST is one-eleventh of the sale price, Laura paid $100 GST.

Laura is registered for GST because her business’s GST turnover is more than $75,000. She is able to claim GST credits for the GST that was in the sale price of her computer ($100).

If you’re registered for GST, the invoice you issue to a customer must be a tax invoice. Tax invoices are different to regular invoices. They include the GST amount for each item (or state that the total price includes GST), along with some extra details.

For your customers to be able to claim their full GST credits, make sure you format tax invoices correctly.

Find out more about tax invoices, including how to correctly format them.

If you haven’t registered for GST

If your GST turnover is under $75,000 and you haven’t chosen to register for GST, you don't include GST in your prices. Any invoices you provide need to show that GST was not included. You also can't claim GST credits for your business purchases.

If your business has an aggregated turnover (your business’s turnover and the turnover of closely associated entities) of less than $10 million, you may be able to get the following GST concessions.

Accounting for GST on a cash basis

This means that you can account for GST and claim GST credits within the tax period when you actually are paid or pay a supplier, rather than based on when the invoices are received.

Paying GST by instalments

You can pay GST by instalments each quarter. These are based on what you or the ATO estimates your GST liability to be. You can vary this amount each quarter.

If a purchase is for private use as well

For a business purchase that you intend to use partly for private purposes, you can:

• claim a full GST credit
• make a single adjustment to account for the private use percentage at the end of your income year

This is known as annual private apportionment of GST credits.

See the ATO's GST Governance and Risk Management Guide for checklists on assessing your GST compliance.

GST applies to most retail sales to Australian consumers of imported:

• services
• digital products (including movies, apps, games and e-books)
• goods worth A$1000 or less.

If your overseas business has a GST turnover of A$75,000 or more, you must register for GST.

Consider whether you need to register for GST if you operate an app store or website (electronic distribution platform) for the sale of imported services or digital products.

Find out more on the ATO website about GST on imported goods and services.

There are other options. You can register for GST:

• by contacting the ATO
• through a registered tax agent