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Australia small business and GST Withheld

Ellie-Mazi
New Member
2 0 1

Hi 

 

We are setting up our small business currently, in Australia if your profit is $75K then you must pay GST. We are small enough to not hit that mark.

 

However if I don't supply an ABN you will withhold 10% for GST, how do we get the 10% returned to us? as it is not required to be paid to the ATO. If I do add an ABN would you still withhold 10% or do you give me the ability to advise that we do not need to pay for GST?

 

Thanks

Ellie-Mazi 

Replies 4 (4)
Lilfuzzybutts
New Member
2 0 2

I’m trying to figure this out too as 10% being withheld from me without the need to pay GST will greatly affect my profit margin. Did you ever get an answer?

Ellie-Mazi
New Member
2 0 1

No I’m still waiting for a response, not sure how long they take to reply 

RSUM
Tourist
4 0 1

Note: Disclaimer - I have no qualifications in any way to answer this . But I am involved with a few small AUS businesses. (Hope this helps)

Shopify is no different to any other supplier.  If you go and purchase a Printer from Officeworks ($100) for you Business they will change you GST (10% = $10 ) in the price Total $110.  If you are not registered for GST your Business claims the expense as $110. -  You can not offset the GST against your Sales - You have not charged any GST on sales as you are not registered.

   If you are registered for GST you claim the expense Inc GST  -  You also then can offset the GST $10 on the purchase against the Sales that you have collected GST on. Then give difference to ATO via a BAS.   (EG: Officeworks.  -  Sales $1000EX tax ,  GST Collected $100. Purchases $100EX Tax paid $10 GST. This  Gives  BAS = $100 - $10 = $90 to the ATO)   

So you need both an ABN and be registered for GST in order for Shopify to provide the exemption. 

 BUT with an exemption (in Shopify) -  That means you then account for the Subscriptions without GST.   There is no offset as you have not paid the GST.

                           EG:  Sales $1000EX Tax plus $100 tax  Purchases = (subscriptions  $400 Exempt NO TAX)     Gives BAS = $100

 

One other point - It is possible to have more Purchase GST than Sales GST - Giving you a Negative BAS . IF so,  since you have paid more GST than you have collected the ATO will refund it through BAS. 

 

Lilfuzzybutts
New Member
2 0 2

Hey, yep I figured it out. Each product in the store has a default setting to charge taxes. Just unclick the charge taxes button and no cat will be added to your items at checkout 👍 A bit frustrating and time consuming but it’s a solution!