International
Export
An export is a supply of goods or services to a customer outside Australia, which is generally GST-free if the conditions are met, while still allowing credits on related purchases.
An export, for GST purposes, is generally a sale of goods that are sent out of Australia, or a supply of certain services or rights to a customer overseas. Exports are usually GST-free, which means the supplier charges no GST to the overseas buyer but is still entitled to claim GST credits on the costs of making the supply. This is different from an input-taxed supply, where no credits are available.
For goods, the GST-free treatment usually requires that the goods are exported within a set period. Under the rule, they generally must be exported within 60 days after the earlier of the time the supplier receives payment or issues an invoice, though the Commissioner can sometimes extend this. You need evidence that the goods actually left Australia, such as shipping documents, airway bills or export declarations.
Different rules apply to different kinds of supplies. Services supplied to a non-resident outside Australia, and certain rights or intellectual property used overseas, can also be GST-free, but only if specific conditions are met. In particular, a supply of services directly connected with goods or land in Australia is usually not GST-free. The rules depend on the type of supply, so check which category applies to what you sell.
Reporting is done through the BAS. GST-free export sales are included in total sales at G1 and also shown as export sales at G2, which tells the ATO those amounts carry no GST. Credits on purchases for your export business are claimed in the normal way. Because exporters often have more credits than GST collected, a net refund is common, which the ATO may review.
Records are essential. Keep the tax invoice or sales invoice, proof of export, and evidence of payment, generally for five years. If you cannot show that an item was exported within the required period, GST may be payable on the sale, even if you did not charge it. Exporters also need to think about customs rules, export permits and, for some goods, excise or duty treatment.
Common mistakes include charging GST on an export that should be GST-free, failing to keep proof of export, and missing the time limit. This is general information only, so confirm your situation with the ATO or a registered tax professional.
Worked example
A registered Australian manufacturer sells $50,000 of goods to a buyer in New Zealand and ships them within 30 days of invoicing, keeping the airway bill. The sale is GST-free, so no GST is charged. The manufacturer paid $22,000 including GST on materials, so can claim $22,000 / 11 = $2,000 in credits. The BAS shows $50,000 at G1 and also at G2 as export sales.
Practical tips
- Keep proof of export such as shipping documents, because without it GST may be payable.
- Watch the 60-day timing rule and ask the ATO if you need more time.
- Remember you can still claim GST credits on purchases related to your export sales.