Despite being one of the most attractive export markets in Asia Pacific, Australia isn’t always easy and simple destination to work. In relation to cross-border trade, the continent ranked 91st out of 190 countries in the World Bank’s Easy Working report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To succeed in Australia, goods-based businesses need to have a solid understanding of how its numerous customs and trading rules apply to them.
“The best bet for the majority of Australian businesses, particularly logistics lessons, would be to work with a logistics provider who is able to handle the heavier complexities from the customs clearance process for the children,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With a little effort though, you can now learn an ample amount of the basic principles to adopt their cross-border operations one stage further.” Here are five quick lessons to obtain service repair shop started:
1. GST (and its particular deferral)
Most Australian businesses will face the 10% Goods and Services Tax, or GST, on the products they sell along with the goods they import. Any GST that the business pays could be claimed back as being a refund from Australian Tax Office (ATO). Certain importers, however, can merely not pay the tax rather than being forced to claim it back, under what the ATO identifies as “GST deferral”. However, your organization have to be registered not only for GST payment, also for monthly Business Activity Statements (BAS) to be qualified to apply for 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 switch over to monthly BAS reporting, specifically those who’ve bound to the greater common quarterly schedule so far.”
Duty is 5% and refers to goods value while GST is 10% and refers to quantity of goods value, freight, insurance, and duty
SMEs must ensure they understand the main difference between duties along with the GST.
2. Changes on the LVT (Low Value Threshold)
Alternatives, Australia had the very best Low-Value Threshold (LVT) for imported goods on the globe, exempting most pieces of $1000 and below from GST. That’s set to alter from 1 July 2018, since the Govt looks to scrap the LVT for all B2C (read: e-commerce) imports. B2B imports and B2C companies with less than AU$75,000 in turnover shouldn’t be affected by modifications.
“Now the legislation has become passed through Parliament, Australian businesses should start get yourself ready for the modifications as soon as possible,” counsels Somerville. “Work with your overseas suppliers on subscribing to a Vendor Number plate (VRN) with the ATO, familiarize yourselves with how to remit GST after charging it, and make preparations to include it in your pricing models.”
The modern legislation requires eligible businesses to join up using the ATO for the Vendor Registration Number (VRN), utilized to track GST payable on any overseas supplier’s goods. Suppliers are accountable for GST payment towards the consumer with the Point of Sale, then remitting it towards the ATO often.
3. Repairs and Returns
“Many businesses arrived at us with questions about whether they’re accountable for import duty and tax after they send the products 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 have to inquire further is: have you been conducting the repairs under warranty?”
If the business repairs or replaces a product or service as part of its warranty obligations, you pay neither duties nor taxes for the product – provided that your documentation reflects this. Range from the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and make sure you still enter a “Value for Customs” – everything you paid to create an item originally – inside your documents.
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