Despite being the most attractive export markets in Asia Pacific, Australia isn’t always the simplest place to trade. In terms of cross-border trade, the country ranked 91st from 190 countries on the globe Bank’s Easy Doing work report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To achieve in Australia, goods-based businesses need a solid idea of how its numerous customs and trading rules apply to them.
“The best choice for many Australian businesses, particularly logistics lessons, is always to work with a logistics provider that can handle the heavier complexities with the customs clearance process on their behalf,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With some effort though, you can now learn enough of the basic principles to take their cross-border operations to another level.” Listed here are five quick lessons to obtain any business started:
1. GST (and its deferral)
Most Australian businesses will face the 10% Goods and Services Tax, or GST, for the products you can choose from as well as the goods they import. Any GST which a business pays could be claimed back as being a refund from Australian Tax Office (ATO). Certain importers, however, can simply avoid paying the tax as an alternative to having to claim it back, under what are the ATO is the term for as “GST deferral”. However, your organization have to be registered not simply for GST payment, also for monthly Business Activity Statements (BAS) to be qualified to receive 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 change over to monthly BAS reporting, particularly those that have bound to the harder common quarterly schedule up to now.”
Duty is 5% and refers to goods value while GST is 10% and applies to sum of goods value, freight, insurance, and duty
SMEs must be sure they know the real difference between duties and the GST.
2. Changes towards the LVT (Low Value Threshold)
Up to now, Australia had the very best Low-Value Threshold (LVT) for imported goods on the planet, exempting most components of $1000 and below from GST. That’s set to alter from 1 July 2018, because the Authorities looks to scrap the LVT for those B2C (read: e-commerce) imports. B2B imports and B2C companies with lower than AU$75,000 in turnover shouldn’t have modifications.
“Now how the legislation may be passed through Parliament, Australian businesses should start getting ready for the changes sooner rather than later,” counsels Somerville. “Work together with your overseas suppliers on subscribing to a Vendor Registration Number (VRN) together with the ATO, familiarize yourselves with how you can remit GST after charging it, and make preparations to incorporate it in your pricing models.”
The newest legislation requires eligible businesses to register together with the ATO for the Vendor Registration Number (VRN), used to track GST payable on any overseas supplier’s goods. Suppliers lead to GST payment on the consumer on the Point of Sale, then remitting it for the ATO regularly.
3. Repairs and Returns
“Many businesses come to us with questions about 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 should instead inquire is: are you currently conducting the repairs under warranty?”
If the business repairs or replaces something included in its warranty obligations, you make payment for neither duties nor taxes around the product – provided that your documentation reflects this. Include the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and make sure you still enter a “Value for Customs” – whatever you paid to produce the product originally – within your documents.
To read more about Australian SME take a look at this useful website: look at this
