Amazon has just announced that it will charge 10% GST on Selling on Amazon fees from 1 July 2017 for Australian based Amazon sellers unless they are registered for GST.
So What Does This Mean?
- You will have to provide your ABN (Australian Business Number) to Amazon, and
- You will have to register with the Australian Taxation Office for GST and lodge either quarterly or annual Business Activity Statements.
If you do not do both of these, then Amazon will charge you an additional 10% on your Selling on Amazon fees ( that's the 15% Amazon Commission), so the commission would be 16.5% of sales.
Providing your ABN number to Amazon and not registering for GST with the ATO will result in you paying 10% GST on Amazon commissions. The ABN that you provide to Amazon enables them to easily check whether you are registered for GST via an API.
At this stage, I believe that the GST only applies to the Amazon commission and not to the FBA fees because FBA fees are services provided in USA & UK etc and not in Australia,
Registering for GST.
In the past, we usually recommended that Amazon sellers did not register for GST because the Amazon sales were not connected to Australia and they had only minimal expenses subject to GST and the cost of preparing Business Activity Statements (BAS) outweighed any GST refunds.
That has now changed. You will have to be registered for GST but it does have some advantages:
- You will be able to claim the GST that you paid on Australian business expenses like telephone, internet, accountants fees, domestic travel to amazon conferences, office supplies, computers etc.
- You will be able to claim the GST paid on Goodle Ads. I predict that Facebook will have to charge GST on their ads soon.
- This will result in a GST refund for most Amazon sellers.
Currently Selling in Australia?
However, if you are currently selling in Australia, via your own website or eBay, and you are not currently registered for GST, then you will have to start charging GST on those sales.
To check whether you are registered for GST, click here.
UPDATE 21/06/2017: At the moment, you cannot add your ABN number in Seller Central as Australia is not an option in the dropdown box. Seller Central advised us that you should be able to add your ABN from 26th June 2017.
Free GST Registration
For Dolman Bateman clients, we will register your Amazon business for GST for free just email Andrew at andrew@dolmanbateman.com.au.
If you are not yet a Dolman Bateman client, now is a perfect time to find out why you should use Dolman Bateman as your trusted accountant.
We are in a unique position to help you in your Amazon business, because we sell on Amazon too! So we know exactly what issues you are facing each day.
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