Despite being one of the most attractive export markets in Asia Pacific, Australia isn’t always the simplest destination to work. In terms of cross-border trade, the country ranked 91st from 190 countries in the World Bank’s Easy Doing Business report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To achieve Australia, goods-based businesses need a solid comprehension of how its numerous customs and trading rules sign up for them.
“The best option for most Australian businesses, particularly Australian SME, is usually to work with a logistics provider who are able to handle the heavier complexities in the customs clearance process on their behalf,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With a little effort though, now you may learn motor the basics to take their cross-border operations to a higher level.” Listed below are five quick lessons to have any company started:
1. GST (as well as deferral)
Most Australian businesses will face the 10% Services and goods Tax, or GST, around the products they sell and also the goods they import. Any GST that the business pays might be claimed back as a refund from Australian Tax Office (ATO). Certain importers, however, can merely not pay the tax rather than being forced to claim it back, under exactly what the ATO refers to as “GST deferral”. However, your business have to be registered not only for GST payment, but in addition monthly Business Activity Statements (BAS) to be qualified to apply for deferrals.
“You don’t reduce any costs by deferring your GST, but you do simplify and streamline your cash-flow,” advises Somerville. “That may prove worthwhile for businesses to exchange up to monthly BAS reporting, particularly those who may have bound to the greater common quarterly schedule so far.”
Duty is 5% and pertains to goods value while GST is 10% and refers to amount of goods value, freight, insurance, and duty
SMEs must ensure they know the main difference between duties and also the GST.
2. Changes on the LVT (Low Value Threshold)
Alternatives, Australia had the highest Low-Value Threshold (LVT) for imported goods in the world, exempting most components of $1000 and below from GST. That’s set to change from 1 July 2018, because the Govt looks to scrap the LVT for all B2C (read: e-commerce) imports. B2B imports and B2C companies with less than AU$75,000 in turnover shouldn’t have modifications.
“Now that the legislation has been passed through Parliament, Australian businesses should start getting ready for the alterations eventually,” counsels Somerville. “Work together with your overseas suppliers on taking a Vendor Registration Number (VRN) with all the ATO, familiarize yourselves with the way to remit GST after charging it, and prepare to add it in your pricing models.”
The modern legislation requires eligible businesses to sign up using the ATO to get a Vendor Number plate (VRN), employed to track GST payable on any overseas supplier’s goods. Suppliers lead to GST payment on the consumer in the Pos, then remitting it on the ATO frequently.
3. Repairs and Returns
“Many businesses arrived at us with questions on whether they’re responsible for import duty and tax once they send their products and services abroad for repair, or receive items away from overseas customers for repair or replacement,” says Mike Attwood, Customs Duty Manager at DHL Express Australia. “The key question we need to question them is: have you been conducting the repairs under warranty?”
If your business repairs or replaces a product or service within its warranty obligations, you spend neither duties nor taxes on the product – providing your documentation reflects this. Include the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and ensure you still enter a “Value for Customs” – everything you paid to produce them originally – with your documents.
Check out about Australian SME go this resource: here
