With the new age of software and digital products, more people are making purchases overseas on digital products – everything from entertainments such as films, books and apps, through to software for business and personal use. Previously, items imported by consumers that are not a physical good or real property were not subject to GST, causing an increasing amount of GST revenue forgone to the respective states and territories.
Since 2017 however, GST has now extended to all offshore digital products to Australian consumers. This is important to note if you are overseas supplying digital products to your customers in Australia or if you are importing digital goods for your business.
If you are not sure which products are classified and the treatment we’ve created a guide.
The liability of the GST could be shifted from the supplier to the operator in the case that operator controls key elements of the product such as the charging, deliver or terms and conditions.
For non-resident businesses, a simplified GST registration has been created. This has been created by the ATO and is simplified in a sense that you:
It is important to remember that when buying or selling a digital product subject to GST the transaction must account for the price of GST, include a tax invoice and pay the GST accordingly.
To read the complete detail of GST on Digital Product click here.