Australia GST for Digital Services: The A$75,000 Threshold Explained

Australia was one of the first OECD countries to apply GST to inbound digital services — the so-called "Netflix tax" that took effect on 1 July 2017. Eight years in, it is one of the more workable regimes worldwide: a simple 10% rate, a clear A$75,000 threshold, and a stripped-down registration option for non-resident vendors. This article walks through how the rules apply to SaaS, who crosses the threshold, and how to register with the ATO.

The legal basis: inbound intangible consumer supplies

Australia's GST regime for digital services is set out in Subdivision 84-A of A New Tax System (Goods and Services Tax) Act 1999. The regime applies to inbound intangible consumer supplies — supplies made to Australian consumers by a non-resident where the supply is not wholly physical. SaaS subscriptions, streaming services, cloud storage, online courses, and digital downloads all qualify.

The A$75,000 turnover test

Registration becomes mandatory once the non-resident vendor's GST turnover from supplies connected with Australia reaches A$75,000 in a rolling 12-month period. The turnover test looks at both:

• Current GST turnover — total value of supplies made in the current month and the preceding 11 months.
• Projected GST turnover — total value likely to be made in the current month and the next 11 months.

If either exceeds A$75,000, you must register. Once registered, you must charge GST on all subsequent supplies regardless of whether the customer is a consumer or a business, subject to the B2B exclusion explained below.

Who counts as an Australian consumer?

A customer is an "Australian consumer" if they are an Australian resident and they are not GST-registered (or, if registered, they do not acquire the supply for business purposes). The vendor must take "reasonable steps" to determine both elements. Reasonable steps include:

• Asking the customer whether they are GST-registered and for their ABN (Australian Business Number)
• Verifying the ABN against the Australian Business Register
• Collecting a declaration that the supply is for business purposes

If the customer provides a valid ABN and declares business use, the supply is not GST-taxable in the vendor's hands. The Australian customer effectively accounts for GST on their own return under the Division 84 reverse charge.

B2B exclusion: Australia's version of reverse charge

Unlike the EU, Australia does not use a formal "reverse charge" label for B2B digital supplies. Instead, Subdivision 84-C provides that a supply to a GST-registered business customer is not an inbound intangible consumer supply, so the non-resident vendor is outside the GST net for that transaction. The Australian GST-registered business then applies Division 84 to self-assess GST if the supply is not for wholly taxable purposes (e.g., for partly input-taxed supplies like financial services).

Step 1: Choose between standard and simplified registration

Non-resident vendors have two options:

1. Standard GST registration. Full registration with an ABN, access to input tax credits, and full compliance obligations.
2. Simplified GST registration. No ABN, no input tax credits, streamlined quarterly returns filed in AUD. Designed specifically for non-resident digital service suppliers.

Most SaaS vendors opt for simplified registration because they have no Australian input costs. Standard registration only makes sense if you have significant Australian expenses (servers, contractors, office space) against which you would claim input GST.

Step 2: Register through ATO Online Services for Non-Residents

Simplified registration is done through the ATO's dedicated non-resident portal (commonly referred to as ATO Online Services for Non-Residents). You will need:

• Legal name and country of incorporation
• Foreign tax identification (e.g., US EIN, UK VAT number)
• Contact details for the authorised signatory
• Expected annual Australian supplies
• An AUSid or equivalent digital identity for portal access

On approval, the ATO issues an ARN (ATO Reference Number) of the form 12-345-678-901. This is your GST identifier for simplified registration.

Step 3: Charging GST correctly

Once registered, you charge 10% GST on taxable supplies to Australian consumers. The price the consumer pays is GST-inclusive, and Australian consumer protection law requires GST-inclusive prices to be displayed on the vendor's website for Australian customers.

For B2B customers with a valid ABN confirmed as business use, you do not charge GST on the invoice but should note that the supply is made without GST under the B2B exclusion.

Step 4: Invoicing and records

Invoices for simplified registrations must include:

1. The vendor's name and ARN
2. The customer's name (address if B2B)
3. Date of issue and invoice number
4. Description of the supply
5. Total amount including GST, and the GST amount separately
6. For B2B exclusion supplies: the statement that GST has not been charged because the supply is made to a GST-registered business

Records must be kept for five years and be producible on request to the ATO, including the evidence used to determine that a customer was or was not an Australian consumer.

Step 5: Filing returns

Simplified registration returns are quarterly and due by the 28th day of the month after the quarter end (e.g., Q2 ending 31 December is due 28 January). Payment is due on the same day, in AUD, and can be made by international wire, credit card, or BPAY (for Australian bank accounts).

Determining customer location

Indicators that a customer is an Australian resident include:

• Australian billing address
• Australian bank account used for payment
• Australian-issued payment card (check BIN)
• IP address from an Australian range
• Australian mobile country code (+61)

As with the EU and Canada, two non-contradictory pieces of evidence are the safe operational standard.

Common mistakes

1. Missing the A$75,000 threshold. The test is rolling 12 months, not financial year. Monitor monthly.
2. Not verifying the ABN. A claimed B2B customer with an invalid ABN should be treated as B2C, charged 10% GST.
3. Displaying GST-exclusive prices to Australian consumers. Australian Consumer Law requires GST-inclusive pricing for consumers.
4. Filing late. The ATO's failure-to-lodge penalty is A$330 per 28 days overdue, up to five units.
5. Conflating New Zealand. New Zealand has its own similar regime with a NZ$60,000 threshold and 15% rate; registrations are not cross-recognised.

Frequently asked questions

What is the Australia GST threshold for digital services?

A$75,000 in rolling 12-month supplies to Australian consumers. Registration is required within 21 days of crossing it.

Does Australia GST apply to B2B SaaS sales?

No, where the customer is GST-registered and acquires the supply for business purposes. Those supplies are excluded from the inbound intangible consumer supply definition.

What is the GST rate on digital services in Australia?

10%.

What's the difference between simplified and standard GST registration?

Simplified is output-only, no ABN, no input tax credits, and uses quarterly returns. Standard is full registration with input credits but more compliance.