2 Australian Tax Considerations to Make When Selling Online
With the e-commerce industry in Australia growing at unprecedented rates, more and more businesses are taking their chances online to make more money. Unfortunately, those rates are not exactly about the number of people buying online, but the number of people selling.
For this reason, the online world has grown increasingly competitive, and anyone looking to survive in this landscape needs every advantage they can get. One of those advantages is the ability to keep one's taxes in check. The ability to tax regulations is vital not only to stay away from trouble but also to protect your wealth!
That said, one of the most popular platforms many people use to sell things online is Amazon. How will this affect your taxes? Here are some considerations to make:
1. Income Tax
As the term implies, income tax is the tax imposed by the government on the income that is generated by businesses. Note that income tax will vary from country to country and will only apply to the government's jurisdiction. Income tax exists to provide the government with a source of money to pay for obligations, provide services, and generally take care of the country's citizens.
That being said, income tax imposed by the Australian government will only be on those with a "permanent establishment" inside the country. This can include anything from a company and agents to warehouses and stores.
If you are an online seller and have all your products on platforms like Amazon, you do not have to pay for income tax because Amazon is not counted as a "permanent establishment." Note that Australia does not have a profit tax as the income tax already covers it. This means that you do not have to worry about that either!
2. Goods and Services Tax
Goods and services tax (GST) is a type of value-added tax on products that consumers pay. This extra money does not go to the business itself, but the government. This is also known as VAT in some other places.
How is this applicable to you? If you are selling on Amazon from Australia, you will need to register for GST if you predict that you will sell over 75,000 AUD worth of goods within twelve months. This means that you will not have to pay for GST if you do not exceed that amount. If you do, then you will have to cover for the tax. Keep in mind that there will also be GST on importation. However, this is claimable once you are registered.
Note that you will need an Australian Business Number (ABN) to conduct business in Australia, even if it is through Amazon. That same number will then become your GST number once you pay for the tax.
By staying on top of the above taxes, you ensure that you remain legally compliant while running your business, allowing you to stay away from trouble that can potentially bring you down.
That said, keeping track of tax is not an easy task, especially if you have plenty of other priorities to worry about. For that reason, we highly recommend working with a professional eCommerce accountant. They will make sure all your taxes and other accounting requirements are kept in check, keeping you safe and secure as you continue thriving in the online world.
Are you looking for small business accountants at Gold Coast to help you out on your eCommerce venture? New Wave can provide you with expert accountants who will help maximize your profits. Contact us today!