GST on low value imported goods

Consultation has concluded

From 1 July 2018, Goods and Services Tax (GST) will extend to low value goods imported by consumers in Australia. For more information, please see our home page at www.ato.gov.au/AusGST.

We have issued further draft guidance on how the new law will apply:

We welcome your comments on the draft views in these draft Law Companion Guidelines during the consultation period, which ends on 10 July 2017. You can provide your comments via our feedback form.

The new draft Guidelines complement the one we published earlier this year, Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods.

The ATO has also previously consulted on other items that relate to our administration of the amendments, such as the information requirements and methods for currency conversion. We have provided a summary of the outcomes of this consultation below.

Enquiries about GST on low value goods can be sent to our email address, AustraliaGST@ato.gov.au.

From 1 July 2018, Goods and Services Tax (GST) will extend to low value goods imported by consumers in Australia. For more information, please see our home page at www.ato.gov.au/AusGST.

We have issued further draft guidance on how the new law will apply:

We welcome your comments on the draft views in these draft Law Companion Guidelines during the consultation period, which ends on 10 July 2017. You can provide your comments via our feedback form.

The new draft Guidelines complement the one we published earlier this year, Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods.

The ATO has also previously consulted on other items that relate to our administration of the amendments, such as the information requirements and methods for currency conversion. We have provided a summary of the outcomes of this consultation below.

Enquiries about GST on low value goods can be sent to our email address, AustraliaGST@ato.gov.au.

Consultation has concluded
  • New draft Law Companion Guidelines for GST on cross-border supplies

    about 1 year ago
    CLOSED: This map consultation has concluded
    Updated: Tuesday 27 June 2017

    We have published two Draft Law Companion Guidelines on GST and cross-border supplies. We invite your comments on our draft views during the consultation period, which ends on 10 July. You can provide your comments via our feedback form.

    Draft Law Companion Guideline LCG 2017/D4: GST on supplies made through electronic distribution platforms is about when an EDP operator is responsible for GST on supplies of:
    • digital products and digital services, from 1 July 2017, and
    • low value imported goods, from 1 July 2018

    Draft Law Companion Guideline LCG 2017/D5: When is a redeliverer responsible for GST on a supply of low value imported goods? explains how the proposed amendments will apply to redeliverers.

    The new draft guidance products complement the draft Law Companion Guideline we published earlier this year, Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods. We will also be placing further information on our website, www.ato.gov.au/AusGST.
    Updated: Tuesday 27 June 2017

    We have published two Draft Law Companion Guidelines on GST and cross-border supplies. We invite your comments on our draft views during the consultation period, which ends on 10 July. You can provide your comments via our feedback form.

    Draft Law Companion Guideline LCG 2017/D4: GST on supplies made through electronic distribution platforms is about when an EDP operator is responsible for GST on supplies of:
    • digital products and digital services, from 1 July 2017, and
    • low value imported goods, from 1 July 2018

    Draft Law Companion Guideline LCG 2017/D5: When is a redeliverer responsible for GST on a supply of low value imported goods? explains how the proposed amendments will apply to redeliverers.

    The new draft guidance products complement the draft Law Companion Guideline we published earlier this year, Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods. We will also be placing further information on our website, www.ato.gov.au/AusGST.
  • Outcomes from our previous consultation

    about 1 year ago
    CLOSED: This map consultation has concluded
    Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods

    Thank you to all who provided comments on our Draft Law Companion Guideline. We are considering changes to the Draft Law Companion Guideline in response to your feedback, such as to add additional flexibility for suppliers in determining whether the exception (where you don’t charge GST) applies for multiple goods that are shipped together in one consignment with a customs value over A$1,000.

    Converting foreign currency amounts to Australian dollars when determining whether goods are low value goods

    In response to your feedback, we propose...
    Draft Law Companion Guideline LCG 2017/D2: GST on low value imported goods

    Thank you to all who provided comments on our Draft Law Companion Guideline. We are considering changes to the Draft Law Companion Guideline in response to your feedback, such as to add additional flexibility for suppliers in determining whether the exception (where you don’t charge GST) applies for multiple goods that are shipped together in one consignment with a customs value over A$1,000.

    Converting foreign currency amounts to Australian dollars when determining whether goods are low value goods

    In response to your feedback, we propose to provide an additional option for currency conversion when determining whether the customs value of goods is A$1,000 or less. This conversion will only be necessary where the goods are sold in a currency other than Australian dollars where the goods are around A$1,000 and it is unclear whether they are low value goods.

    Under the proposed legislation, you can convert these amounts using the Department of Immigration and Border Protection rate for the day when the amount payable for the goods is first agreed with the customer.

    We propose to issue a legislative instrument allowing you to also choose either of the following alternative methods:
    1. You can use the Reserve Bank of Australia rate for that day (or for the previous day, if none is available that day), or

    2. You can generally use any commercial exchange rate to buy Australian dollars for that day (or for the previous day, if none is available that day). This would be achieved by allowing you to use any commercial exchange rate which is consistently above the RBA rate in terms of units of foreign currency per Australian dollar.

    The second option is proposed to be added following consultation to provide extra flexibility for businesses. The exchange rates available are proposed to be restricted to ensure there is no systematic difference between the exchange rates that are available for the purposes of determining whether there is a taxable supply, and the exchange rates used to determine whether GST applies when goods are imported. This could otherwise lead to double non-taxation of goods that are close to the A$1,000 threshold.

    We will publish a draft of the legislative instrument shortly for your comment.

    Other items from our previous consultation

    We propose that the information requirements under the legislation, such as the approved forms, will be those that we consulted on previously.

    We propose that the alternative methods for converting amounts to Australian dollars to calculate the GST payable under the Bill will be equivalent to those that will be provided for suppliers of imported services and digital products under the new rules that apply from 1 July 2017. This means that if you choose to, you will be able to convert the GST payable on your sales of low value imported goods into Australian dollars on the final day of your tax period. We will publish a draft of this legislative instrument shortly for your comment.
  • Draft Law Companion Guideline: GST on low value imported goods

    about 1 year ago
    CLOSED: This map consultation has concluded
    Consultation closed on 24 March 2017

    The draft Law Companion Guideline sets out our draft view of how the proposed amendments will apply to determine when a supply of low value goods is connected with Australia.

    More information about the ATO’s practice of issuing Law Companion Guidelines is available on our website.
    Consultation closed on 24 March 2017

    The draft Law Companion Guideline sets out our draft view of how the proposed amendments will apply to determine when a supply of low value goods is connected with Australia.

    More information about the ATO’s practice of issuing Law Companion Guidelines is available on our website.
  • Information requirements

    about 1 year ago
    CLOSED: This map consultation has concluded
    Consultation closed on 24 March 2017

    The Bill contains additional information requirements for suppliers, or entities treated as suppliers for GST purposes. This entity may be the actual supplier of the goods, an operator of an electronic distribution platform (EDP), or a redeliverer.

    The ATO is consulting on what information should be included in these approved forms, as we understand that businesses will need to adjust their systems to comply with the Bill, which is proposed to apply from 1 July 2017.

    We are also consulting more broadly on how these requirements may relate to...
    Consultation closed on 24 March 2017

    The Bill contains additional information requirements for suppliers, or entities treated as suppliers for GST purposes. This entity may be the actual supplier of the goods, an operator of an electronic distribution platform (EDP), or a redeliverer.

    The ATO is consulting on what information should be included in these approved forms, as we understand that businesses will need to adjust their systems to comply with the Bill, which is proposed to apply from 1 July 2017.

    We are also consulting more broadly on how these requirements may relate to each other in practice, as we consider that suppliers (or entities treated as suppliers) may be able to produce one document that can be used to satisfy all three requirements.

    There are three information requirements under the Bill:
    1. A supplier (or entity treated as the supplier) must issue a notice to the recipient in the approved form which includes the amount of GST, if any, on supplies of low value goods that are subject to GST because of the proposed amendments.

      An approved form is a mechanism through which the Commissioner of Taxation can set the information that is required under the relevant provision of the legislation.

      We propose that this approved form is a document that includes sufficient information to enable the following to be clearly ascertained:
      • the identity and registration number of the entity treated as the supplier for GST purposes
      • the identity of the recipient, if the price of the supply is above $1,000
      • the date of issue of the document
      • a description of what is supplied, including the quantity (if applicable) and the price
      • the amount of GST payable on the transaction
      • if GST does not apply to the supply of all the goods in the transaction, information that identifies which of the goods were supplied as a taxable supply.

    1. The Bill proposes that a supplier (or entity treated as the supplier) must ensure that certain information is included on the customs documents for the goods that they supply, if the goods are supplied as an offshore supply of low value goods.

      Under proposed section 84-93 of the Bill, this information includes:
      • the registration number of the entity treated as the supplier for GST purposes
      • the extent to which the supply was a taxable supply, and
      • the Australian Business Number (ABN) of the recipient, if applicable.

    1. The Bill proposes that GST payable at the border on a taxable importation can be switched off if GST has applied to a taxable supply of low value goods, provided that notification is provided in the approved form within time.

      We propose that the requirements of this approved form are met where the import declaration for the goods contains:
      • the registration number of the entity treated as the supplier for GST purposes, and
      • the extent to which the supply was a taxable supply.

      We set this out in greater detail in our Summary of the proposed information requirements.

      More information on the information requirements is included in our draft Law Companion Guideline: GST on low value imported goods, at paragraphs 180 to 186.

      Consultation questions

      We invite your comments on the following:
      • Do you agree with the proposed content of the approved forms?
      • Do you have any comments on how the information requirements may work in practice?
      • Can your existing commercial documents be adapted or otherwise used to meet these information requirements?
  • Converting amounts to Australian dollars when determining the customs value of goods

    about 1 year ago
    CLOSED: This map consultation has concluded
    Consultation closed on 24 March 2017

    See updates under outcomes from our previous consultation

    To determine whether GST applies to a supply under the Bill, a supplier (or entity treated as supplier) must consider whether the goods supplied are low value goods. Low value goods are goods (except for tobacco, tobacco products or alcoholic beverages) that have a customs value of $1,000 or less when the consideration for the supply is first agreed with the recipient.

    Note: Most low value consignments of goods sent to Australia have a customs value well below $1,000, and therefore will
    ...
    Consultation closed on 24 March 2017

    See updates under outcomes from our previous consultation

    To determine whether GST applies to a supply under the Bill, a supplier (or entity treated as supplier) must consider whether the goods supplied are low value goods. Low value goods are goods (except for tobacco, tobacco products or alcoholic beverages) that have a customs value of $1,000 or less when the consideration for the supply is first agreed with the recipient.

    Note: Most low value consignments of goods sent to Australia have a customs value well below $1,000, and therefore will be a supply of low value goods. Under the proposed amendments, this currency conversion will only really need to be considered where the goods have a customs value of around $1,000.

    If goods are sold in a foreign currency, their price can be converted to Australian dollars on the day that the consideration for the supply is first agreed with the recipient.

    Under the Bill, there are two ways of working out the equivalent value in Australian currency of goods sold in a foreign currency for this purpose:
    • using the method set out in the Customs Act 1901, which uses the exchange rate stipulated by the Department of Immigration and Border Protection, or
    • in an alternative manner determined by the Commissioner.

    Rates prescribed by the Department of Immigration and Border Protection

    The method set out in Customs Act 1901 involves using the exchange rate stipulated by the Department of Immigration and Border Protection (DIBP). Each working day DIBP prescribes a ruling rate of exchange for 28 foreign currencies.

    The applicable rates are available on their website. These rates of exchange are valid for twenty-four hours from one minute after midnight on the day after they were uploaded excepting weekends, where Friday’s rates of exchange are valid for Saturday, Sunday and Monday. For public holidays and bank holidays, the exchange rate is valid from one minute after midnight on the day before the public holiday or bank holiday until the RBA’s next working day.

    For further information, see Exchange Rates on the DIBP website.

    Proposed alternative method

    The Bill provides the Commissioner with the ability to make a legislative instrument that specifies an alternative method of converting foreign currency amounts for these purposes.

    We propose that a draft legislative instrument could be created that sets out an alternative method. This is intended to reflect the earlier time point at which the customs value must be determined when compared to the existing processes for imported goods, where the exchange rate of the day of exportation must be used. Under the existing processes, the ruling rates from DIBP may not be readily available for use at this earlier point in time.

    This alternative method would allow suppliers (or entities treated as suppliers) to calculate the Australian dollar amount using the relevant currency exchange rate published daily (except on public and bank holidays) by the Reserve Bank of Australia. If the relevant day is a public or bank holiday, we propose that the previous day’s rate could be used.

    These rates can be found on the Reserve Bank of Australia website. These rates are available as an RSS feed.

    We seek your feedback on the proposed method and whether any further options are needed for suppliers.

    More information on determining the customs value of goods for the purposes of determining whether there is a supply of low value goods under the proposed amendments is contained in paragraphs 41 to 61 of the draft Law Companion Guideline.
  • Converting amounts to Australian dollars when calculating the amount of GST payable on a taxable supply

    about 1 year ago
    CLOSED: This map consultation has concluded
    Consultation closed on 24 March 2017

    Section 9-85(2) of the GST Act provides the Commissioner with the ability to make a legislative instrument, specifying a method for converting foreign currency amounts to Australia Dollars, in order to calculate the amount of GST payable on taxable supplies.

    A draft legislative instrument for this purpose was already under consultation on our Consultation Hub. Clause 7(c) of the definition of conversion day contained measures to provide non-resident fully GST registered suppliers of inbound intangible consumer supplies with the option of performing their currency conversions using an agreed exchange rate...
    Consultation closed on 24 March 2017

    Section 9-85(2) of the GST Act provides the Commissioner with the ability to make a legislative instrument, specifying a method for converting foreign currency amounts to Australia Dollars, in order to calculate the amount of GST payable on taxable supplies.

    A draft legislative instrument for this purpose was already under consultation on our Consultation Hub. Clause 7(c) of the definition of conversion day contained measures to provide non-resident fully GST registered suppliers of inbound intangible consumer supplies with the option of performing their currency conversions using an agreed exchange rate for the last day of the relevant tax period. This agreed exchange rate is defined in the legislative instrument as the RBA rate, a rate from a foreign exchange organisation, or such other rate as may be agreed between the supplier and recipient.

    We propose that this draft legislative instrument be similarly expanded to allow non-resident fully registered offshore suppliers of low value goods with the option to also use the same conversion rate and day as that described above.

    We seek your feedback on the proposed method and whether any further options are needed for suppliers. More information on how to determine the amount of GST payable on a taxable supply of low value goods is included in our draft Law Companion Guideline, at paragraphs 160 to 179.