Australia Foreign Registration and GST: Overseas Business Claimants

Explore the reclaim opportunities available within the industry

Most businesses are familiar with the compliance requirements and the burdensome red tape of recovering input VAT (value-added tax) domestically - albeit roughly! Yet what about VAT potential abroad? In Australia, the equivalent of VAT is GST (goods and services tax). This consumption tax is levied on most goods and services at a standard rate of 10%. How does this affect your business? Well, if you’re a non-resident business established outside of Australia, you may be eligible to claim the Australian GST that you’ve paid on business travel to Australia. In this piece, we’re deep diving into how a non-resident business can recover GST and how a simple foreign registration can elevate your business finance. 

The reclaim potential for non-resident businesses

The first step to navigating GST and foreign registration in Australia is understanding how the process applies to your business. Do you have GST potential in Australia? The answer hinges on a few core eligibility criteria, being: 

• You’re a non-resident business established outside of Australia

• You do not make any supplies or sales that would be subject to GST in Australia
• You are exclusively running your business from outside of Australia

If all of the above applies to your business and you incur business expenses in Australia, you may be entitled to claim the Australian GST you have paid - including costs related to your taxable income, including travel expenses, goods and services, and many more industry-specific business costs. However, claiming the GST incurred doesn’t come without a few stringent requirements. The most pressing matter? A special registration is needed.  

Standard GST-only registration 

Many non-resident businesses with expenses in Australia undertake the process of standard GST-only registration, granted that they meet the eligibility criteria (no establishment in Australia and no sales in Australia). This is due to the significant financial value that reclaiming GST incurred can bring to a business. No pre-registration costs can be recovered, but once registered, a business has four years to claim invoices received during registration.

However, the process of registering for standard GST-only in Australia as a non-resident company doesn’t come without its own set of complexities and challenges. A few of the most common challenges include the following: 

Eligibility: To register for standard GST-only, businesses must meet the eligibility criteria. One of the most stringent factors determining eligibility is that the non-resident must refrain from making sales that would be subject to GST in Australia or create any fixed establishment or employees based in the country. If this is the case, alternative registration and compliance requirements will apply. 

Appointing a tax agent: One of the requirements entails appointing a tax agent to act on your behalf concerning the relevant GST affairs and processes. This may prove challenging without expert guidance on the role and responsibilities of a tax agent - especially when undertaking the process from outside of Australia.  

Compliance:  Certain compliance still applies to non-resident business claimants. This may include lodging activity statements and other industry-specific requirements to ensure your business is aligned with the latest rules and regulations within the Australian GST system. Once registered, quarterly returns should be filed. VATIT is able to assist in filing nil returns when needed.

Communicating with the Australian Taxation Office (ATO) 

Due to the process primarily involving non-resident business claimants from overseas, it may prove challenging to communicate with the ATO promptly and effectively. This is primarily attributed to potential language barriers or time zone differences. A non-resident business that is registered for standard GST-only can't lodge electronically using online services for business as this is only available to Australian resident businesses. The best way to lodge your GST return is through an Australian registered tax or BAS agent. They can lodge on your behalf and view BAS and reminder messages. 

Fortunately, although these challenges exist, so do we. At VAT IT, our Australian GST registration team is specifically designed to administer and maximize your GST registration, claims, and compliance in Australia so you can leverage the benefits without the burden. Which benefits? Here’s a look. 

The benefits of reclaiming GST in Australia

By becoming GST registered as a foreign business in Australia, you not only gain access to participate in the GST system, but the refund potential can create significant cash flow advantages. In addition, businesses that become registered for standard GST-only in Australia can leverage a significant competitive advantage. By being able to reclaim a portion of the business expenses incurred in Australia, businesses can benefit from more affordable suppliers while offering more competitive pricing structures.

The GST registration and reclaim process

As most businesses are well familiar with, the tax landscape is rarely straightforward and prone to change at a moment’s notice. This is why knowing exactly what you’re in for before navigating the process without the needed assistance is essential. If a non-resident business wishes to participate in the GST-only registration process, it must thoroughly evaluate whether they meet the eligibility requirements. Other vital aspects to consider include: 

• Application documents: All application documents required for registration must be true original copies. Since businesses cannot send their original documents to the tax office, all documents must be legalised by a notary public or an Australian Embassy.
• Filing: Regarding expenses in Australia, once registered, businesses file returns every quarter. However, if costs are not incurred on an ongoing basis, businesses must file nil quarterly returns until there is a business expense again. 
• Record-keeping: Correct record-keeping requirements are paramount in successfully reclaiming GST. This means keeping all original invoices and ensuring the correct invoicing instructions are applied to make them eligible for recovery. 
• Registering for one-off events:
  Fortunately, registering for standard GST-only in Australia doesn’t have to be limited to businesses with regular expenses in the country. If a company is planning on attending a significant once-off business event, it may deregister after 12 months. 

Replace the hassle with one centralized solution

Despite the intricacies and complexities of the Australian GST system, businesses can leverage the advantageous GST system to save on the GST incurred on eligible invoices and costs. How? 

Cue VAT IT in-house specialists. 

At VAT IT, we understand that sometimes you need a little help from your friends. Especially when you are able to facilitate the entire Australian registration and GST process. Our close relationships with local tax authorities and our in-depth knowledge and expertise regarding industry-specific GST processes allow our clients to replace the heavy lifting with one centralized solution. 

New to the concept of GST in Australia? We offer a complimentary evaluation service that determines whether a client is eligible for a refund and registration.

Once eligible, we step in and:

• Provide expert advice on registration documents eligibility.
• Register your business to claim Australian GST.
• File your business quarterly GST returns, inclusive of Nil returns.
• De-register your business should you no longer require an Australian GST registration.
• Provide you with a cash refund on all GST-eligible business expenses incurred in Australia. 

Stop leaving significant savings behind - we’ve got you (re)covered.