Despite being the most attractive export markets in Asia Pacific, Australia isn’t always the best destination to trade. In relation to cross-border trade, the country ranked 91st beyond 190 countries on the planet Bank’s Simple Conducting business report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To achieve Australia, goods-based businesses have to have a solid idea of how its numerous customs and trading rules affect them.
“The best bet for most Australian businesses, particularly Australian SME, is to make use of a logistics provider who are able to handle the heavier complexities from the customs clearance process for him or her,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With a little effort though, you can now learn enough of basic principles to adopt their cross-border operations to a higher level.” Here are five quick lessons to acquire service repair shop started:
1. GST (as well as deferral)
Most Australian businesses will face the 10% Products and services Tax, or GST, about the products you can choose from plus the goods they import. Any GST which a business pays can be claimed back as a refund from Australian Tax Office (ATO). Certain importers, however, can merely avoid paying the tax rather than being forced to claim it back, under what the ATO identifies as “GST deferral”. However, your company have to be registered not just for GST payment, but also for monthly Business Activity Statements (BAS) to be entitled to 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, particularly those who may have saddled with the harder common quarterly schedule up to now.”
Duty is 5% and refers to goods value while GST is 10% and pertains to amount goods value, freight, insurance, and duty
SMEs must be sure they do know the difference between duties and also the GST.
2. Changes to the LVT (Low Value Threshold)
As yet, Australia had the greatest Low-Value Threshold (LVT) for imported goods on the planet, exempting most items of $1000 and below from GST. That’s set to improve from 1 July 2018, because the Authorities looks to scrap the LVT for many 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 may be passed through Parliament, Australian businesses should start getting ready for the modifications at some point,” counsels Somerville. “Work using your overseas suppliers on taking a Vendor Registration Number (VRN) with all the ATO, familiarize yourselves with how you can remit GST after charging it, and prepare to incorporate it to your pricing models.”
The newest legislation requires eligible businesses to sign up with all the ATO for any Vendor Registration Number (VRN), employed to track GST payable on any overseas supplier’s goods. Suppliers lead to GST payment for the consumer at the Pos, then remitting it for the ATO on a regular basis.
3. Repairs and Returns
“Many businesses come to us with questions regarding whether they’re answerable for import duty and tax when they send their goods 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 must inquire further is: are you conducting the repairs under warranty?”
In case your business repairs or replaces a product within its warranty obligations, you make payment for neither duties nor taxes on the product – providing your documentation reflects this. Add the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and make certain you continue to enter a “Value for Customs” – whatever you paid to generate them originally – in your documents.
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