Australia is one of the largest ecommerce markets in APAC, but its GST rules for cross-border sellers are often misunderstood.
If you’re a US ecommerce brand selling into Australia, you’re likely responsible for collecting and remitting GST at checkout even without a local entity.
While the complexities of international taxation can be a challenge, being well-informed and proactive can pave the way for success in a highly lucrative marketplace.
This guide breaks down Australia GST for ecommerce, including thresholds, low-value goods rules, and how to stay compliant.
What is Australia’s GST?
The goods and services tax (GST) in Australia is a value-added tax of 10% on most goods, services, and other items sold or consumed in the country. This tax is similar to the value-added tax (VAT) systems in many European markets, but has its own set of rules and regulations.
As an e-commerce business, it’s important to understand how GST should be charged on transactions. In Australia, GST is based on CIF which is the cost, insurance, and freight value. This means that the 10% tax is applied to the product price plus shipping cost and insurance.
Here’s an example of calculating GST in Australia:
- Product Price – $41 AUD
- Shipping Cost – $8 AUD
- Insurance – $1 AUD
- Total Value for Customs – $50 AUD
- GST – $5 AUD
DTC brands who are required to collect GST will need to make sure their checkout process is charging this tax on any purchases from customers in Australia.
When You Need to Register for GST in Australia
Australia applies a 10% Goods and Services Tax (GST) on most goods and services. Since July 1, 2018, Australia removed the GST exemption for low-value imports, meaning foreign ecommerce brands must now collect GST at checkout if they exceed the registration threshold. This is known as the Low Value Imported Goods (LVIG) regime, designed to level the playing field between local and international sellers.
Foreign businesses are not required to register for GST in Australia unless their sales within the country exceed $75,000 AUD (~$48,000 USD) over any 12-month period. Once this threshold is surpassed, registration becomes mandatory, requiring the collection of 10% GST at checkout and its subsequent remittance to the Australian Taxation Office on orders below the $1,000 AUD de minimis. Note that GST is remitted through the import process when the order value exceeds 1,000 AUD.
Low-Value vs High-Value Goods: GST Comparison Table
Note: DDP (Delivered Duty Paid) includes GST and duties at checkout, creating a seamless customer experience, while DDU (Delivered Duty Unpaid) requires customers to pay taxes at delivery, often causing friction and lower conversion rates. Learn more about the differences in our guide to DDP vs DDU for global ecommerce brands.
Australia GST Registration and Compliance for E-Commerce
The Australian Taxation Office (ATO) has stepped up its enforcement regarding GST collection for e-commerce transactions and many US merchants have received communications instructing them to register. If your brand has crossed the $75,000 AUD sales threshold, here are your options to become compliant:
- Register for Australia GST: You can apply for a tax ID through the ATO website and file your own GST returns quarterly. Keep in mind you’ll still need to update your checkout process to collect the 10% GST from consumers.
- Enroll in Passport’s Seller of Record® Program: By partnering with Passport as your international shipping carrier and signing up for their Australia Seller of Record program, Passport would handle all aspects of collecting and remitting GST to the proper authorities – so you don’t have to. There’s a small administrative fee for this service calculated as 5% of the taxes collected. For example, on a $100 order, Passport would collect $10 in GST and charge a $0.50 fee for managing compliance.
Here at Passport, we understand the intricacies that come with international shipping, especially regarding import tax regulations. Our Seller of Record (SOR)is designed to give e-commerce brands a simpler way to handle Australia GST compliance with a quick and seamless enrollment process. If you’re interested in Passport’s SOR solution, reach out to our team here to get started.
Authored by Thomas Taggart
Head of Global Trade | Passport
Thomas Taggart is a cross-border commerce leader with more than 20 years of experience in international shipping and regulatory affairs. As the Head of Global Trade, Thomas helps ecommerce brands go global by simplifying international trade, tax, and product compliance issues. Prior to Passport, he brought international shipping solutions to market through multiple roles in UPS’s product development organization.
Frequently Asked Questions
What is the GST rate in Australia?
The GST rate in Australia is 10%, applied to most goods and services, including ecommerce sales to Australian consumers.
What is the GST registration threshold in Australia?
Foreign businesses must register for GST in Australia if their sales to Australian consumers exceed AUD $75,000 in any 12-month period.
Once this threshold is exceeded, GST registration is mandatory.
Do US ecommerce companies need to register for GST in Australia?
Yes—US ecommerce companies must register for GST if their sales to Australian consumers exceed AUD $75,000 in any 12-month period.
Once registered, they are required to collect and remit 10% GST on applicable sales.
How does Australia GST work for ecommerce?
Australia GST is a 10% consumption tax applied to goods sold to Australian consumers.
- For low-value goods (≤ AUD $1,000): GST is collected at checkout by the seller or marketplace
- For high-value goods (> AUD $1,000): GST is collected at import by customs or carriers
Who pays GST in Australia?
GST is ultimately paid by the end consumer, but businesses are responsible for collecting and remitting the tax if they are GST-registered.
Do businesses pay GST in Australia?
Businesses do not bear the cost of GST directly. Instead, they collect GST from customers and remit it to the Australian Taxation Office (ATO) if they are registered.
What happens if you don’t register for GST in Australia?
If you exceed the AUD $75,000 threshold and fail to register, you may be liable for:
- Backdated GST (retroactive tax)
- Penalties and interest charges
Businesses are generally expected to register within 21 days of exceeding the threshold.
What are low-value goods under Australia GST?
Low-value goods are items valued at AUD $1,000 or less.
For these goods, GST must be collected at checkout by the seller or marketplace under the Low Value Imported Goods (LVIG) regime.
Do customers pay GST on delivery in Australia?
Customers may pay GST at delivery if:
- The order value exceeds AUD $1,000, or
- The shipment is sent using a DDU (Delivered Duty Unpaid) model
This can result in additional fees and a poorer delivery experience.
Is Australia GST or VAT?
Australia uses a Goods and Services Tax (GST) system.
This is similar to VAT (Value-Added Tax) used in other countries, but Australia refers to it as GST.
Is GST the same as VAT in Australia?
GST and VAT are both consumption taxes applied to goods and services.
While they function similarly, each country—including Australia—has its own rules, rates, and thresholds.
How is Australia GST calculated?
Australia GST is calculated by applying 10% to the total order value, which typically includes the product price, shipping, and insurance.
Formula:
GST = Total order value × 10%
Is GST calculated using CIF or FOB in Australia?
For imports over AUD $1,000, GST is calculated based on the CIF value (Cost, Insurance, Freight) plus any applicable duties.
The AUD $1,000 threshold itself is based on the FOB value (goods only).
Do I have to ship DDP if I am registered for GST in Australia?
No, DDP (Delivered Duty Paid) is not required but GST collection and remittance liabilities still apply.
However, using DDP is considered a best practice, especially for high-value goods, because it:
- Reduces unexpected fees at delivery
- Improves customer experience
- Lowers the risk of refused shipments
