Damon Mcknight
If you are a business owner in Australia, you may need to register for a goods and services tax (GST) number. GST is a broad-based tax of 10% on most goods and services sold in Australia. You must register for GST if your business's GST turnover (gross income minus GST) exceeds the GST threshold of $75,000 per year (or $150,000 for non-profit organisations). You can register for GST online through the Australian Taxation Office (ATO) website or the Australian Business Register (ABR) website. Before you register, you need to have an Australian Business Number (ABN).
| Characteristics | Values |
|---|---|
| GST turnover threshold | AUD 75,000 |
| Non-profit organisation GST turnover threshold | AUD 150,000 |
| GST rate | 10% |
| Registration methods | Online via Australian Business Register (ABR) or Australian Taxation Office (ATO) website, Business Portal on the ATO website, or with the help of H&R Block |
| Registration requirements | Australian Business Number (ABN), business or enterprise name, contact information, trading name recognised by the Australian Securities and Investments Commission (ASIC) |
| Registration time | Up to 28 days, usually quicker if registered online |
| Registration period | Must stay registered for at least 12 months |
| Registration backdating | Limited to 4 years |
| Registration cancellation | Possible if no longer required to be registered |
| Non-resident requirements | Depending on business activities, may need to register for GST with different proof-of-identity requirements |
| Accounting methods | Cash basis or accruals basis; businesses with a turnover of less than $10m can choose |
| Reporting requirements | Submit GST via Business Activity Statements (BAS) on a quarterly or monthly basis, depending on turnover |
| Tax invoice requirements | Include GST amount for each item or state that the total price includes GST, along with extra details |
| GST credits | Can be claimed for GST included in the price of goods and services bought for the business |
| Director ID requirement | If you're a director of an Aboriginal and Torres Strait Islander corporation |
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What You'll Learn
Calculating GST turnover
To calculate GST turnover, you must first understand what GST turnover is. GST turnover is your business income (excluding certain sales), not your profit. This means that your GST turnover is the total business income minus the GST amount.
For example, if you sell $80,000 worth of goods in a year, your GST turnover is $80,000 minus the GST amount. If the GST rate is 10%, the GST amount is $8,000, so your GST turnover is $72,000.
If your GST turnover is $75,000 or more ($150,000 or more for non-profit organisations), you must register for GST. This is the GST threshold. You can calculate your GST turnover for the current and previous 11 months, or you can calculate your projected GST turnover for the current month and the next 11 months.
You can also use a GST calculator to help you calculate the GST amount and the total cost including GST. To work out the cost including GST, you multiply the amount exclusive of GST by 1.1. For example, if the GST-exclusive cost is $1000, the cost including GST is $1000 x 1.1 = $1100.
If you are registered for GST, you can claim GST credits for the GST included in the price of items you've bought for your business. These GST credits can be higher than the amount of GST your business has to pay, in which case you may receive a refund.
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Applying for an ABN
To apply for an ABN (Australian Business Number), you must first ensure that you are entitled to an ABN. Not everyone is entitled to one. You can apply for an ABN when you first register your business name, or at a later time. You can apply for an ABN online using the Australian Business Register. You can also apply for other business registrations as part of your ABN application.
Your application will be processed faster if you can provide information such as your tax file number. You can still start your application and save it as you go, but the issuing of your ABN may be delayed. Your details will be added to the Australian Business Register (ABR), and you can request that certain details are not disclosed if you have privacy concerns.
If your ABN application is refused, you will receive a refusal number and a letter within 14 days confirming the refusal and outlining your review rights. If you receive a reference number, it may mean that the ABR needs to check some details in your application or that more information is needed. The ABR aims to review your application within 20 business days and will contact you if further information is required.
You can check ABN Lookup at any time to see if your ABN has been processed. If your business structure changes, you may need to apply for a new ABN.
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Registering online
Registering for a Goods and Services Tax (GST) number in Australia can be done online. This can be done through the Australian Business Register (ABR) website, the Australian Taxation Office (ATO) website, or the Business Portal on the ATO website.
Before registering for a GST number, it is important to determine whether your business needs to be registered for GST. Not all businesses or enterprises in Australia need to register for GST. However, penalties may apply if you are required to register and fail to do so. Generally, if your business's GST turnover is over the threshold of AUD 75,000, you must register for GST.
To register for a GST number online, you will need to have an Australian Business Number (ABN). You can apply for an ABN when you first register your business name or at a later time. It is recommended to enable JavaScript in your browser for a smooth registration process.
When registering for a GST number, you will need to provide certain information. This includes your ABN, business or enterprise name, and contact information. You will also need to specify the date your registration is effective. This date is often when you expect your annual turnover to reach the GST threshold or earlier if you choose to register voluntarily.
Additionally, if you operate under a trading name, it is crucial to verify that it is valid and recognized by the Australian Securities and Investments Commission (ASIC). This step is important for all business types, including sole traders and service providers such as Uber.
By registering for GST, businesses can claim credits for the GST included in the price of goods and services purchased for their operations. This can be done through GST invoices, which are different from regular invoices as they include the GST amount for each item or state that the total price includes GST.
Registering for a GST number in Australia can be a straightforward process when completed online, and it often results in quicker processing compared to other methods.
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Claiming GST credits
If you are registered for GST, you can claim back the GST included in the price of things you've bought for your business. This is called a GST credit or an input tax credit. To claim GST credits in your BAS, you must be registered for GST.
You can claim a credit for any GST included in the price you pay for things you use in your business. This includes goods and services you buy for your business. You can only claim a GST credit for the part of the purchase relating to your business use. For example, if you buy a computer for your office that costs $1100, including GST, you can claim back the GST included in the sale price.
You must have a tax invoice to claim a GST credit for purchases that cost more than $82.50 (including GST). Your supplier has 28 days to provide you with a tax invoice after you request one. An invoice containing incorrect or incomplete information is not a valid tax invoice. You may be able to treat it as a tax invoice if it is missing information that can be obtained from other documents the supplier has given you. If you are a small business, you may be able to account for the private portion of your business purchases once a year, rather than each time you lodge an activity statement.
You can claim GST credits by lodging a Business Activity Statement (BAS) or an annual GST return. If your GST credits are higher than the amount of GST your business has to pay the ATO, you could get a refund.
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Cancelling registration
You can cancel your GST registration if you are no longer required to be registered. If your GST turnover is below the threshold for compulsory registration, you can choose to cancel your GST registration unless you:
- Are a taxi driver (including ride-sourcing or chauffeur services).
- Represent an incapacitated entity, such as a bankrupt individual or a company in liquidation, that is registered or required to be registered for GST.
- Are an Australian resident who acts as an agent for a non-resident that is registered or required to be registered for GST.
If you are pausing or permanently closing your business, you must still meet your tax and superannuation lodgment, reporting, and payment obligations. If you are cancelling your GST registration because you restructured, sold, or closed your business, you must also cancel your ABN registration within 28 days. If you are registered with the Australian Securities & Investments Commission (ASIC) but no longer carry on a business, you can keep your ABN registration but must cancel your GST registration.
When you cancel your GST registration, your fuel tax credit, luxury car tax (LCT), and wine equalisation tax (WET) registrations will also be automatically cancelled. The date you choose to cancel your GST registration should be the last day you want to be registered. You can cancel your GST registration by completing the Application to cancel registration (NAT 2955) and posting it to the Australian Taxation Office.
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Frequently asked questions
Not all businesses need to register for GST. If your business provides taxi or limousine travel for passengers, you must register. Otherwise, you must register if your GST turnover is over $75,000.
To apply for a GST number, you must first have an Australian Business Number (ABN). You can then register for GST online through the Australian Taxation Office (ATO) website or the Australian Business Register (ABR) website.
You will need to include all necessary business details, such as your ABN, business name, and contact information. You will also need to specify the date your registration is effective.
It can take up to 28 days to process your GST registration, but it is often quicker if you register online.
