Australian Low-Value Tax Law

Learn how Zonos helps manage the Australian Low-Value Tax law.

The Australian low-value tax scheme, also known as the Simplified GST law, has been in effect since July 1st, 2018. Let’s decode this law and what it means for businesses selling goods to Australia.

What is the Australian Low-Value Tax law? 

• For online retailers, if you sell, or expect to sell, over 75,000 AUD to Australian customers within a 12-month period, you are required to remit GST directly to the Australian Taxation Office (ATO) via a Simplified GST for Importers process.

  • Wholesale and B2B transactions are exempt from the threshold calculation and do not need to be remitted.
  • Note that the 75,000 AUD threshold is inclusive of product sales, not including the GST.
  • If you are a US retailer, keep in mind that a currency exchange rate of 1 AUD = 0.75 USD would require AU GST registration if you sell over ~56,000 USD annually to Australia.
  • We recommend registering for GST if your current month and trailing 11 months of sales were equivalent to or greater than 65,000 AUD or ~48,000 USD.

• If you do not reach the 75,000 AUD threshold, you will not need to register for GST.

  • If you are not registered, Zonos Hello or Zonos Checkout will inform Australian shoppers that they will not have to pay GST at the time of order or at the time of delivery if their cart total is under 1,000 AUD.

How to register for GST? 

1. Get an AUSid - To access the simplified GST registration form [discussed in step two], you will need a secure credential called an AUSid. Simply download the AUSid application and set up your account to securely access the online platform for simplified GST whenever you need to. If you need an AUSid, go to AUSid online services
2. Register for simplified GST - After you obtain your AUSid, select Register now to access the online services for non-residents with your AUSid and register for simplified GST, or visit the Simplified GST Instructions.

Registration steps:

The session can expire quickly so be sure to already have your AUSid application open before entering your username.

1. Go to the AUSid login page and copy the reference number.
2. Enter your username and copy the reference number.
3. Open the downloaded AUSid application on your computer and paste in the reference number.
4. Enter your password into the AUSid application.

1. If you are required to collect GST on low-value orders and have a registered AUSid, adding your tax ID inside of your Zonos Dashboard will turn on GST calculation and collection for your Australian shoppers. Zonos Checkout or API will automatically start calculating 10% GST on all orders to Australia, even those under the de minimis of 1,000 AUD.
2. Once enabled, international low-value taxes (ILVT) will always be collected at the time of checkout. There will not be an option to pay later or at the time of customs clearance.

Zonos recommends:

Avoid double taxation

If you are currently collecting GST from your customers at the time of checkout on orders under 1,000 AUD, we do not recommend managing a two-tiered system where you collect on orders under 1,000 AUD and then let your customer pay upon delivery when the order is over 1,000 AUD. The issue with this and the recommended course of action are explained below.

Note that when an order exceeds 1,000 AUD, Australia will collect GST at the time of customs clearance. If you collect GST at the time of checkout and the conversion rate changes before it is delivered, the customer could be double taxed - by you and by customs. This negative shopper experience can be avoided by doing the following:

Send all orders over 1,000 AUD DDP (Delivery Duty Paid). DDP, also known as billing the duties, taxes, and fees to the shipper, will ensure GST, duty, and other cross-border fees are billed back to you by the carrier. You must be sure to send the shipment via a carrier and service level that supports DDP. If the order is sent DDP (and the customs documentation does not reflect your collected GST at the time of the order), you will be billed by the carrier for GST and duty. This means you would not remit GST back to the ATO on orders over 1,000 AUD, because you paid it through the carrier.