If you are thinking of starting a business, then you need to understand whether or not you need to be registered for GST.
This is not to be confused with the need for an ABN Australian Business Number, which all businesses need regardless of their entity type.
Who should register
You must register for GST if:
- your business or enterprise has a GST turnover (gross income minus GST) of $75,000 or more
- your non-profit organisation has a GST turnover of $150,000 per year or more
- you provide taxi or limousine travel for passengers (including ride-sourcing) in exchange for a fare as part of your business, regardless of your GST turnover – this applies to both owner drivers and if you lease or rent a taxi
- you want to claim fuel tax credits for your business or enterprise.
If your business or enterprise doesn’t fit into one of the above categories, registering for GST is optional. However, if you choose to register, generally you must stay registered for at least 12 months. When you optionally choose to be GST registered you may elect to lodge BAS returns Annually.
Your GST turnover is your gross business income (not your profit), excluding any:
- GST you included in sales to your customers
- sales that are not for payment and are not taxable
- sales not connected with an enterprise you run
- input-taxed sales you make
- sales not connected with Australia.
What does being GST registered mean…
You must issue tax invoices and charge GST at the current rate.
You must remit the GST collected less GST paid to ATO via a BAS Business Activity Statement Return
We suggest accounting software to help to calculate and account for the GST amounts.
We also suggest you keep aside GST amounts in a separate bank account to not misjudge your cashflow position.
How should you do Tax Invoices
Lodging your BAS or annual GST return
You report and pay GST amounts to the ATO, and claim GST credits, by lodging a business activity statement (BAS) or an annual GST return.
Tax Agents can lodge your BAS, while giving you accuracy, correct lodgement, longer to lodge and pay as well as forecasting your year to date GST and tax position.