- When importing business goods into Australia, your company will be liable for customs duty and various taxes.
- Do imported goods need to be declared?
- Is there a customs duty threshold? How much is it?
- How is the goods’ value calculated?
- How is the amount of customs duty calculated?
- Is GST payable when importing goods?
- Can GST payments be deferred, or credited?
- Australian Customs Duty Calculator
When importing business goods into Australia, your company will be liable for customs duty and various taxes.
In this FAQ we take a look at what those payments may be, and how they are applied.
Do imported goods need to be declared?
Yes. Australia’s Customs & Border Protection department requires the owner of the goods (this can be the actual owner or someone that has control of the goods) to lodge an Import Declaration.
This declaration must be lodged electronically via the department’s Integrated Cargo System (ICS). A contracted freight forwarder or customs broker will be able to handle this for you.
Is there a customs duty threshold? How much is it?
Yes. All goods imported to Australia are subject to duty, Goods & Services Tax (GST), plus other taxes that may be applicable according to the class of the goods.
Along with an import declaration, duties and/or taxes that are applied must be paid before the goods are cleared by Customs.
On July 1st, 2018 new legislation was introduced to charge a 10% GST on the price of products under a value of AUD $1000, such as books, jewellery, electronic devices, sports equipment, cosmetics or clothing imported into Australia.
Click here to find out more.
How is the goods’ value calculated?
Most goods are valued by Customs & Border Protection at the transaction value in Australian Dollars.
Customs use the rate of exchange prevailing on the day of export of the goods (not on the day the goods arrive in Australia) as the exchange rate.
To find out what these exchange rates are published in the Government Gazette every Wednesday. This link has instructions on how to find out the exchange rate used by Customs.
How is the amount of customs duty calculated?
The amount payable is determined by the classification of the goods and other factors including exemptions, concessions & existence of preference schemes (e.g. a Free Trade Agreement between the origin country & Australia).
When importing goods, the submission of the declaration to the ICS will automatically calculate any duty, GST, Wine Equalisation Tax or Luxury Car tax payments that are required.
A payment advice is then issued to the owner. Once settled, Customs will clear the goods. On most products imported into Australia, customs duty is 5% of the value of the goods converted to Australian dollars, but this is dependent on the type of goods.
You will need to check with your freight forwarder or Home Affairs for the correct amount of customs duty.
Is GST payable when importing goods?
Yes. Aside from a few exemptions for some basic foodstuffs, certain medical aids and appliances, precious metals and other items, most goods will be subject to GST when imported.
GST is applied at 10% of the Australian dollar value of the goods when imported.
The value of the imported goods is equal to the goods value (as detailed above), plus the duty payable, and any transport & insurance fees for the goods.
Can GST payments be deferred, or credited?
Yes. GST on a taxable importation is payable by all businesses, organisations and private individuals. Whether they are registered for GST or not.
A business or organisation registered for GST, importing goods as part of its activities, may be able to claim a GST credit for any GST paid on those goods.
If you are an importer and registered for GST, you may be able to defer the payment by participating in the Deferred GST Scheme.
This scheme allows GST on taxable importations to be deferred until the first business activity statement lodged after the goods are imported. Participation in the scheme requires certain eligibility criteria to be met:
- have an ABN
- must be registered for GST
- lodge activity statements, online, monthly.
- pay activity statement payments electronically.
Additionally, a business may be ineligible if
- its tax returns & payments are not up to date
- an applicant has been convicted or penalised for certain offences
Full details of applying for the Deferred GST Scheme can be found here
Australian Customs Duty Calculator
We get asked a lot how to calculate the customs duty when importing certain products.
Here is a quick calculation to work out the customs duty on the value of goods. Please note, use this calculator as a guide only as customs duty is highly dependent on the type of goods, but most household items should come under this customs duty calculation.
- Convert your purchase into Australian dollars.
- The import duty is based on 5% of the value of your goods converted to Australian dollars.
- To calculate the GST on imported goods, add the value of the goods in Australian dollars, plus freight, insurances and the import duty. The 10% GST is calculated on this total.
For example, if you purchase jewellery for AUD$500, add the 5% customs duty $25 plus the cost of freight and insurances, say at $42. This gives a total of $567 plus a 10% GST of $56.70. The total cost of goods equals approximately $623.70.
To get the correct import duty and GST totals for imported goods, we recommend contacting a customs broker or freight forwarder who will be able to help.
For more information about importing goods into Australia, refer to this guide from the Australian Customs & Border Protection Service.
When Australia’s new rules for GST on low-value imports came into effect, it caused quite a stir amongst consumers & overseas business owners alike. The rules can be confusing, so we take a look at how a non-resident business can register for GST to cut through the noise.
How We Help
Penguin Management has over 20 years experience helping businesses establish & expand their operations in Australia.
Speak to one of our accounting outsourcing team today for more information about GST credits & deferments on your company’s goods importations.
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Post updated: November 2018