When it comes to tax in Australia, it can be hard to get your head around all of your obligations, especially if you are starting your first small business or something similar. Goods and services tax (GST) experts Accountants Australia advise that GST is an area of confusion among a lot of first time business owners, and is something that gets brought up at their offices regularly.
GST in Australia is very confusing. Some small businesses have to have it. Some small businesses don’t. So how do you know if you need to register for GST? Basically, it all comes down to how much money you expect your business to turn over each financial year.
Firstly, what is GST?
GST, or goods and services tax, is basically a small fee that the government puts on top of all purchases and sales in the country. It currently sits at 10% of the price of the item, which means that when you sell something, you will actually have to collect 110% of the amount that you actually want to sell it for – if your business is registered for GST. The 10% tax rate then needs to be paid on to the Australian Tax Office (ATO).