Home – New Forums Selling online What are my tax obligations?

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  • #996222
    AllyJ
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    Hi,
    If I have an online store with no specific regional customer base in mind, what are my tax obligations?
    example: I am based in Australia, but I sell to someone in America (lets assume GST is collected)

    I asked someone else this (an online seller from Australia) and I was advised if I sold in the USA I would need to collect USA taxes, however, as I am not a US citizen, I didnt gel with that idea.

    There was also some confusion around if I obtained the customer through an advertising campaign that I aimed directly at an american customer base. However, I dont think this should be an issue either. However the customer came to me, whether it be through advertising or an organic search, should not effect taxes.
    Happy to clarify if required
    thanks!

    #1206237
    Corey
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    hi and welcome,

    A good place to start is @ Reporting and paying tax | Australian Taxation Office

    Cheers
    Corey

    #1206238
    AllyJ
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    thanks Corey, Ive checked a few pages on the ATO website, but none really answer my question. i think I know the answer. Im an australian citizen for taxation purposes, therefore i collect and pay tax to the ATO. But it would be weird for someone in the USA to click on my website, purchase from me and be charged GST, this would confuse them. hmm, in fact, they may even be GST exempt.

    #1206239
    Corey
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    ATO would be THE best place to ask.

    Cheers
    Corey

    #1206240
    AllyJ
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    Corey, post: 245130, member: 31331 wrote:
    ATO would be THE best place to ask.

    Cheers
    Corey

    hmm, last time I tried to call ATO, it was a merry go round of unanswered phone calls, and no options to talk to anyone. But I appreciate your answers Corey, thank you

    #1206241
    Paul – FS Concierge
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    You should seek an Accountant’s advice.

    In the meantime, you *may* be advised that it is best to pay tax either in Australia or the USA – choice is yours.

    I ran a US based recruitment site and paid all of my taxes in Australia.

    #1206242
    AllyJ
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    Thankyou. I am waiting on a reply from my accountant, but I was getting impatient :). I thought perhaps this would be the place to ask for real world examples.

    #1206243
    John Debrincat
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    AllyJ, post: 245121, member: 49832 wrote:
    Hi,
    If I have an online store with no specific regional customer base in mind, what are my tax obligations?
    example: I am based in Australia, but I sell to someone in America (lets assume GST is collected)

    I asked someone else this (an online seller from Australia) and I was advised if I sold in the USA I would need to collect USA taxes, however, as I am not a US citizen, I didnt gel with that idea.

    There was also some confusion around if I obtained the customer through an advertising campaign that I aimed directly at an american customer base. However, I dont think this should be an issue either. However the customer came to me, whether it be through advertising or an organic search, should not effect taxes.
    Happy to clarify if required
    thanks!

    Hi [USER=49832]@AllyJ[/USER] if you are selling online and you sell to a customer outside of Australia and deliver to that customer overseas you do not collect or pay GST. International transactions are GST free. When you ship the product to the customer you may have to pay some import duties to the target country for products over a certain value or possibly certain types of products. Your shipping company will advise you.

    John

    #1206244
    AllyJ
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    John Debrincat, post: 245155, member: 2969 wrote:
    Hi [USER=49832]@AllyJ[/USER] if you are selling online and you sell to a customer outside of Australia and deliver to that customer overseas you do not collect or pay GST. International transactions are GST free. When you ship the product to the customer you may have to pay some import duties to the target country for products over a certain value or possibly certain types of products. Your shipping company will advise you.]

    Perfect, thanks John

    #1206245
    burtontelford
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    AllyJ, post: 245121, member: 49832 wrote:
    Hi,
    If I have an online store with no specific regional customer base in mind, what are my tax obligations?
    example: I am based in Australia, but I sell to someone in America (lets assume GST is collected)

    I don’t think you can charge GST overseas. GST is for Australia only. “Exports of goods and services from Australia are generally GST-free.”

    #1206246
    AllyJ
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    I have an answer from my accountant:

    Ultimately from a GST perspective, GST is to be charged on any goods and services that have a connection to Australia.

    So if you are selling goods to an overseas consumer, then GST will not be applicable.

    You will still be required to declare the income in your tax return however, along with expenses associated with the production of the income.

    You are a resident of Australia for tax purposes so yes, you are liable for tax here in Australia. Should another tax jurisdiction tax you on the earnings, should Australia have a double tax treaty with that country, then you will be eligible for a tax credit for any foreign tax paid. I don’t think you will be liable to tax however but let me know if you do come across it.”

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