1) Do You Need to Register for GST?
- Turnover threshold: You must register when your GST turnover is at or above $75,000 (non-profits: $150,000).
- Ride-sourcing/taxi drivers: Must register for GST regardless of turnover.
- Register early: If you’re approaching the threshold, register before you cross it—back-dating gets messy.
- Pricing: Decide whether you quote prices inc. GST (B2C) or show ex. GST (common B2B) and stay consistent across your site and invoices.
2) Invoices That Pass the ATO Test
To claim GST credits (and to stay compliant as a seller), your tax invoices should include:
- “Tax invoice” clearly stated
- Supplier identity/ABN, issue date, description, quantity/price
- The GST amount (or a statement that the total includes GST)
- Buyer identity/ABN if the total is $1,000 or more
Tip: For purchases over about $82.50 (GST-inclusive), you generally need a valid tax invoice to claim input tax credits—keep digital copies.
3) Cash vs Accrual: Pick the Right Reporting
- Cash basis: You report GST when you receive/pay cash. Helpful for tight cash flow.
- Accrual basis: You report GST on invoices issued/received, regardless of payment. Often better for larger, established businesses.
- Switching: You can apply to change methods—ensure your software tax codes and opening balances are adjusted correctly.
4) BAS Lodgement: Frequency & Timing
- Quarterly is common for SMEs; monthly may suit high-turnover or refund-heavy businesses.
- Annual applies to a small group (conditions apply).
- Agent advantage: Using a registered agent can provide extended lodgement dates and reduce late-lodgement penalties.
5) Claiming GST Credits (and When You Can’t)
- Claim only the business-use portion for mixed-use purchases (phone, internet, vehicles).
- No credits on input-taxed purchases (e.g., certain financial supplies, residential rent) and some entertainment unless FBT applies.
- For assets, ensure they’re capitalised correctly and claim credits based on business use.
- Keep valid tax invoices and evidence of apportionment (e.g., logbooks, usage diaries).
6) Exports, Imports & Overseas Services
- Exports: Often GST-free if you export the goods within the required timeframe—keep proof of export.
- Imports: GST may be payable at the border; approved businesses can use the deferred GST scheme so it’s reported/claimed on the BAS instead of paying upfront.
- Overseas SaaS/digital services: Some foreign suppliers charge Australian GST; if they don’t and you’re not entitled to full credits, reverse-charge rules can apply. Map these in your software.
7) GST-Free, Input-Taxed & Mixed Sales
| Sale type | GST collected? | GST credits on related costs? | Examples |
|---|---|---|---|
| Taxable | Yes (10%) | Yes (business-related) | Most goods/services |
| GST-free | No | Yes | Most exports, some health/education/basic foods |
| Input-taxed | No | No (generally) | Residential rent, certain financial supplies |
| Mixed supply | Partly | Apportion | Package with taxable + GST-free items |
8) Vehicles, Big-Ticket Assets & the Car Limit
- GST credits on passenger vehicles are generally capped by the luxury car limit—you can’t claim credits above the GST on that limit.
- Use correct tax codes for deposits, trade-ins, and financed purchases (hire purchase/leases) to avoid BAS misstatements.
- For mixed business/private use, apportion the credit using a valid method (e.g., logbook).
9) Common Mistakes & Quick Fixes
| Mistake | What happens | Fix |
|---|---|---|
| Wrong tax codes in software | Over/under-stated BAS | Run a tax code review; reclassify and amend if needed |
| Claiming credits without valid invoices | Credits denied on review | Collect missing invoices; request copies from suppliers |
| Double-claiming on reimbursements | Duplicate credits | Use a clear policy for reimbursements vs allowances |
| Incorrect treatment of exports/imports | Cash-flow hit or errors | Set up deferred GST (if eligible) and keep export proof |
| Input-taxed confusion | Credits claimed incorrectly | Identify input-taxed supplies and block related credits |
10) Record-Keeping Checklist
- Valid tax invoices for purchases (over the low-value threshold)
- Export evidence (commercial docs, freight, departure records)
- Import statements (customs entries, deferred GST statements)
- Apportionment evidence (logbooks, usage diaries, calculation notes)
- Software audit trail (tax code mapping, BAS workpapers, adjustments)
Retention: Keep records for at least five years from lodgement—go digital for easy retrieval.
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Book a BAS Review Individual ReturnsFAQs
Do I have to register for GST under $75,000?
Generally no, unless you drive a taxi/ride-share (must register regardless). Many startups register voluntarily to claim credits and appear more established.
Can I claim GST without a tax invoice?
For small purchases under the low-value threshold you may not need a full tax invoice, but above that you generally do. Best practice: keep proper tax invoices for all material claims.
Should I choose cash or accrual reporting?
If cash flow is tight, cash basis helps. If you issue many invoices on terms or want cleaner matching with your accounts, accrual can be better. We can assess and help you switch correctly.
How is GST handled on overseas subscriptions (SaaS)?
Some foreign suppliers charge Australian GST. If they don’t and you’re not entitled to full credits, reverse-charge rules may apply—set the correct tax codes and keep invoices.
Can I claim full GST on a luxury car?
No. Credits are generally limited to the GST on the car limit; business-use apportionment also applies.
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Get GST Help See Our ServicesGeneral information only. This article is not tax advice. Laws and thresholds can change—seek personal advice from a registered tax agent before acting.