2018-2019 Financial Year Tax Update to Australian eCommerce
It’s the most wonderful time of the year when Australian eCommerce get to prepare for the new tax year changes. Be a winner or loser, most of the time everyone has extra rules that they need to be aware of. So courtesy of our accountant, here are a few of the major changes that will most probably be affecting the administration of Australian eCommerce.
GST on imports less than $1,000
As of 1 July 2018 any individual who imports from overseas must pay 10% of GST on their goods or services. This means that the eCommerce overseas must report and pay GST to the Australian Tax Office, which has caused a lot of grief to the giants like Amazon and eBay. This means if you have a separate business entity based overseas and you export to Australian individuals, you must charge GST to them and report/pay to the ATO. Take note that this is calculated in AUD, not the foreign currency.
The interesting thing though, if you are an Australian eCommerce registered for GST that imports goods below $1,000 you will not pay GST. So this new tax only applies to individuals and seems to be a measure to slug consumers shopping in non-Australian websites.
I know what you may be thinking, that you can just do your overseas personal shopping through the business then repay your business. But goods or services need to be purely intended for Australian eCommerce use for this exemption to apply.
Corporate Tax Rate Deduction
At the moment this is still up in the air due to parliament being parliament. But at present, if your eCommerce is turning over less than $50 million your tax rate from 1 July 2018 will be 27.5%.
If you have fallen behind the compulsory superannuation contributions to your employees you can take advantage of a 12-month amnesty in getting it sorted out without penalties being applied. This means for contributions that you missed between 1 July 1992 to 31 March 2018 can be made without the concern of getting fines for lateness. Australian eCommerce will have to complete a form and send this to the ATO to take advantage of this.
NSW is changing the threshold in which you have to start paying payroll tax. The threshold is currently $750,000 per anum. From 1 July 2018, it will be changing to:
- 1 July 2018 – $850,000
- 1 July 2019 – $900,000
- 1 July 2020 – $950,000
- 1 July 2021 – $1,000,000
Tasmania is reducing their rate of payroll tax to 4% from 1 July 2018 for wages between $1,250,000 and $2,000,000.
Single Touch Payroll
This is a new reporting system where all your employee expenses, wages, PAYG and super contributions must be reported every time you pay your employees. If you are paying your employees weekly and depending on your accounting software it may cause an additional administration headache.
For employers with 20 or more employees you must start reporting this information from 1 July 2018. Next year from 1 July 2019, this will apply to all employers.
The majority of accounting software will be able to take care of this but you but you should get in touch with your provider to work out the best system for you.
We hope this advice is helpful. Although we are not an accounting firm, we can help with the potential changes within your website when it comes to GST reporting. So call or email us to get a free consultation.