GST and when you must register
Australia's main consumption tax is the Goods and Services Tax (GST), a flat 10 percent added to most sales of goods and services. You charge GST on top of your price and remit it to the ATO, usually through a Business Activity Statement (BAS).
You are required to register for GST once your business turnover reaches the A$75,000 threshold over any twelve-month period (A$150,000 for non-profit organisations), and from the first day you expect to cross it. Taxi, rideshare and limousine drivers must register regardless of turnover. Below the threshold, registration is optional. The key consequence of being registered is that your invoices must become valid tax invoices, the document that lets your GST-registered customers claim a GST credit for the tax they paid you.
Every business that carries on an enterprise should also hold an Australian Business Number (ABN). You can hold an ABN without being registered for GST, but if you are registered for GST you will also have an ABN, and it must appear on your tax invoices.
What a valid tax invoice must show
If you are registered for GST, the document you issue for a taxable sale is a tax invoice, and the ATO sets out exactly what it must contain. For most sales the following details are required:
- The words "Tax invoice"
- The document must be clearly identified as a tax invoice, ideally as a prominent heading. A plain "invoice" is not enough when you are registered for GST.
- Your identity and ABN
- The seller's business or trading name and your Australian Business Number (ABN). The ABN is mandatory on a tax invoice.
- Date of issue
- The date the tax invoice was issued, so the sale can be allocated to the correct reporting period.
- Description of items
- A brief description of the goods or services sold, including the quantity where relevant, so the supply is identifiable.
- GST amount or a statement
- Either the GST amount for each item, or a statement that the total price includes GST (for example "Total price includes GST") when GST is exactly one-eleventh of the total.
- The total price
- The full amount payable for the sale, GST included.
- Buyer details over A$1,000
- For sales of A$1,000 or more, the tax invoice must also show the buyer's identity or their ABN.
The thresholds that change the rules
Two dollar figures decide how much detail a tax invoice needs. For sales under A$1,000, the tax invoice can be simpler: it needs the words "Tax invoice", your identity and ABN, the date, a description of the items, and the GST amount or a statement that the price includes GST. The buyer's details are not required at this level.
For sales of A$1,000 or more, the tax invoice must additionally include the buyer's identity or ABN. It is good practice to capture the buyer's details on every invoice anyway, so you never have to reissue a document because a sale turned out to cross the threshold.
A third figure applies to very small sales. For sales of A$82.50 or less (GST inclusive), your GST-registered customers do not strictly need a tax invoice to claim a GST credit; a receipt, cash register docket or similar record is enough. You can still issue a tax invoice for these sales, and many businesses do for consistency.
Invoicing when you are not registered for GST
If your turnover is below A$75,000 and you have chosen not to register, you must not charge GST and you must not issue a tax invoice. Instead you issue a regular invoice that shows no GST. It is misleading, and against the rules, to label a document "tax invoice" or to add a GST component when you are not registered.
Your regular invoice should still carry the basics: your business name, your ABN if you have one, the invoice date, a description of the goods or services, the quantity and the total amount. There is no GST line and no one-eleventh statement, because no GST was charged.
Quoting your ABN is strongly advisable even when you are not registered for GST. If you supply goods or services to another business and do not quote an ABN, that business may be required to withhold 47 percent of the payment under the "no ABN withholding" rule and send it to the ATO. Putting your ABN on the invoice avoids this withholding. If you genuinely have no ABN because the activity is a hobby rather than an enterprise, a "Statement by a supplier" form can be used instead.
Australian invoicing questions
When do I have to register for GST in Australia?
You must register for GST once your business turnover reaches A$75,000 over any twelve-month period, or as soon as you expect to cross that threshold (A$150,000 for non-profits). Taxi, rideshare and limousine drivers must register regardless of turnover. Below the threshold, registration is optional.
What is the difference between an invoice and a tax invoice?
A tax invoice is the document a GST-registered business issues for a taxable sale; it must show the words "Tax invoice", your ABN and the GST amount, and it lets GST-registered customers claim a GST credit. A plain invoice is what you issue when you are not registered for GST, and it shows no GST. Only a registered business may issue a tax invoice.
What must an Australian tax invoice include?
A valid tax invoice must show the words "Tax invoice", the seller's identity and ABN, the date of issue, a description of the items sold, the GST amount (or a statement that the total includes GST) and the total price. For sales of A$1,000 or more it must also show the buyer's identity or ABN.
Do I need to put my ABN on an invoice if I am not registered for GST?
You are not legally required to register for an ABN if you are not running an enterprise, but quoting your ABN on business-to-business invoices is strongly advisable. If you supply another business and do not quote an ABN, that business may have to withhold 47 percent of the payment and send it to the ATO under the no-ABN withholding rule.
How much GST do I charge in Australia?
GST in Australia is a flat 10 percent added on top of the sale price of most goods and services. On a GST-inclusive total, the GST component is one-eleventh of the total. Some supplies are GST-free (such as basic food, certain health and education services) or input-taxed, so confirm the treatment for what you sell.
Do small sales need a tax invoice?
For sales of A$82.50 or less (GST inclusive), your GST-registered customers do not strictly need a tax invoice to claim a GST credit; a receipt or cash register docket is enough. For sales under A$1,000 a simplified tax invoice without the buyer's details is acceptable, and for sales of A$1,000 or more the buyer's identity or ABN must appear.