topic Re: GST on dropshipping on ebay.com in Selling

GST on dropshipping on ebay.com

voodootoot — Tue, 26 Jul 2016 10:01:31 GMT

Hi, does anyone knows if i need to pay GST on income that is made on ebay.com as a dropshipper ? I've never sold anything in australia and never charged GST.

my turnover was over $75K

can anyone recommend a good e-commerce accountant to deal with this situation ?

thanks.

Re: GST on dropshipping on ebay.com

davewil1964 — Tue, 26 Jul 2016 10:16:55 GMT

Off the top of my head, as an Australian resident, you would not be liable for GST on items that have never been in Australia. Assuming you are not dropshipping from Australia. Unlikely, given very little is manufactured (except submarines) here anymore.

You would, however, be liable for income tax.

Re: GST on dropshipping on ebay.com

voodootoot — Tue, 26 Jul 2016 10:29:21 GMT

for some strange reason my tax agent told me today i will have to pay GST and that freaked me out, i'm almost sure that i don't have to pay GST on goods that are not sold in australia, do you know any accountant that can handle this?

I'm an australian citizen, I dropship from amazon U.S to ebay U.S

Re: GST on dropshipping on ebay.com

bsal6160 — Tue, 26 Jul 2016 10:38:38 GMT

i think you may find the "S" part of GST could apply. Goods and SERVICES Tax. Being an Australian resident you are providing a service.

Re: GST on dropshipping on ebay.com

lyndal1838 — Tue, 26 Jul 2016 10:42:33 GMT

I agree with bsal....you are providing a service.

Any good accountant should be able to advise you.

Re: GST on dropshipping on ebay.com

voodootoot — Tue, 26 Jul 2016 10:46:02 GMT

ok, so i provide a service, but isn't gst is for goods and services within australia? when all the services and goods were purchased in the U.S do i still have to pay GST on them?

Re: GST on dropshipping on ebay.com

lyndal1838 — Tue, 26 Jul 2016 10:53:55 GMT

You are earning an income in Australia by providing a service.

Re: GST on dropshipping on ebay.com

Anonymous — Tue, 26 Jul 2016 11:03:53 GMT

Get a second opinion from another accountant, or, for free call the ATO.

Most likely GST is not required but Income tax would be.

There is some info here: https://www.ato.gov.au/business/gst/when-to-charge-gst-(and-when-not-to)/taxable-sales/#SalesConnectedWithAus

Re: GST on dropshipping on ebay.com

lyndal1838 — Tue, 26 Jul 2016 11:16:57 GMT

There is a clause that states the services are GST free if the recipient is outside Australia but there are strict rules.

I would ring the ATO to see if you do qualify for providing a GST free service.

Re: GST on dropshipping on ebay.com

bsal6160 — Tue, 26 Jul 2016 11:22:21 GMT

Having quickly read the ATO site on GST free services the OP would be lioable for GST.

Sales in the course of operating your business

For a sale to be taxable, you must provide the goods or services as part of conducting your business.

Sales connected with Australia

GST applies to sales that are connected with Australia, whether they are goods, property or other things

3.Things other than goods or property

the seller makes the sale through a business they carry on in Australia

Re: GST on dropshipping on ebay.com

jensmanchester-australia — Tue, 26 Jul 2016 12:25:41 GMT

I think it could depend on what country your buyers are from.

If you are dropshipping only to US buyers then I wouldn't think GST applies (only income tax)

If you are dropshipping to Australian Buyers from the US that is effectively the same as importing so I would assume GST would apply to both the purchase price and the sale price if you are over the GST threshold.

Re: GST on dropshipping on ebay.com

voodootoot — Tue, 26 Jul 2016 14:19:42 GMT

cheers, i only dropship to the US. never dropshipped to aussie buyers.

Re: GST on dropshipping on ebay.com

phorum_junkie* — Tue, 26 Jul 2016 16:44:36 GMT

If you only trade in the US are you not liable to pay US sales tax if you do not have to pay GST here. Seems like a very large loophole if you can have that level of turnover without having to pay somebody somewhere.

Re: GST on dropshipping on ebay.com

clarry100 — Tue, 26 Jul 2016 20:39:57 GMT

Just wondered how it is that neither eBay nor PayPal pay gst on the fees we sellers pay them when they provide that service within Australia?

Re: GST on dropshipping on ebay.com

annieoakley2000 — Tue, 26 Jul 2016 21:26:24 GMT

Most likely because they have the type of accountants/lawyers the Op is looking for

Re: GST on dropshipping on ebay.com

transport-posters — Tue, 26 Jul 2016 22:12:26 GMT

On a Business Activity Statement (BAS) there is a field to put in an amount of income which is not subject to GST. If you did not charge GST for those sales then you total the sales from those amounts and put it into that field.

I used to do work for someone in the United Arab Emirates so always put his payments into that field.

You would of course have to declare it as income for your personal income tax return, as it's a source of income in the end.

Re: GST on dropshipping on ebay.com

ozstockman — Wed, 27 Jul 2016 00:46:03 GMT

@lyndal1838 wrote:
I agree with bsal....you are providing a service.
Any good accountant should be able to advise you.

He is providing a service but not to Australians. So he does not need to pay GST.

Morever he needs to be registered for GST to collect and pay it and he only has to registered if his turnover is over $75000

Re: GST on dropshipping on ebay.com

ozstockman — Wed, 27 Jul 2016 00:49:18 GMT

@lyndal1838 wrote:
You are earning an income in Australia by providing a service.

And he will be paying a tax on his income. It has nothing to do with GST which does not apply to him.

How is it different from selling overseas? The fact that he is selling a service to overseas customers does not make any difference with seliing a product to the same type of customers.

Re: GST on dropshipping on ebay.com

voodootoot — Wed, 27 Jul 2016 03:57:55 GMT

thanks everyone for your replay, i went to a different accountant and was told there is no GST on international sales as expected, but its strange that a different accountant would say otherwise, they might not know a thing or two on e-commerce. There is tax income but i was willing to pay it anyway as i have prepared my BAS and declared all income, its the GST that threw me off as i never charged it so paying GST would mean a huge hole in my pocket, glad it got sorted.

Re: GST on dropshipping on ebay.com

lyndal1838 — Wed, 27 Jul 2016 08:08:32 GMT

You received 2 different opinions here so it is not surprising that 2 different accountants have differet opinions.

If I were you I would be asking the ATO for a Private Ruling. Let them decide on whether you need to pay GST. Once you have that you are not subjected to opinions of different accountants.