What you need to know when selling to customers in Australia

Over the next few weeks we will be hosting a series of "Go Global" events for retailers and brands. The events in Los Angeles, New York and London will have a particular focus on Australia with our expert partners including ShipStation, Australian Tax Office (ATO), Hurricane as well as NORA, which is Australia's most influential retail industry network connecting retailers, service providers, markets and customers to accelerate learning and business growth.

Australia should be on the top of any brand's radar that is looking to expand globally, but the recent regulatory changes mean that you need to be informed of the latest on how to be successful in Australia, but it also prepares you for other countries as they follow suit with similar regulations such as New Zealand.

Shipstation and SEKO know retail and e-commerce, and we know Australia. In the last year we’ve helped many US businesses understand recent changes to the local rules and maximise their opportunities in the Australian market.

A seamless client experience is our business, which is why we’re holding sessions to explain how we can make shipping to your Australian customers easy.

Like the Wayfair changes in the US, there are tax changes happening all over the world that are designed to even the playing field for all ecommerce sales. Recent changes in Australia lead this international trend.

To help you understand the Australian rules, we’ve invited the Australian Taxation Office (ATO) to take part in our session to answer your questions about the recent tax changes that apply to online retail sales from overseas.

From 1 July 2018, the Australian changes have meant that retailers that sell more than AUD 75,000 (USD 52,000) worth of goods into the Australian market, need to register and goods and services tax (GST) for most goods under AUD 1,000 (USD 700). Like sales tax, GST can be added to your sales and these goods are not stopped at the Australian border to apply additional taxes.

The Australian rules may mean you need to make some changes. To make it easy to comply, Australia has developed a fast-tracked registration system and simplified reporting of only two fields, Total Taxable Sales and GST, and this is paid once each quarter.

In comparison, the UK applies taxes and, collection fees on each individual parcel over GBP 15 (USD 19) at the border. Australia doesn’t stop low value goods at the border for taxes, improving delivery times for shippers and consumers benefit by having to only pay once at the checkout.

Taxes are never popular and the Australian changes were no exception. Credit to the ATO, they have invested heavily in education of sellers, running a number of information sessions in cities and countries around the world in the lead-up to the 2018 changes. They have even taken the step of not applying any penalties in the first year whilst businesses try to get it right. It appears that many of the big-volume players (Amazon, eBay, Alibaba, ASOS, etc.) have accepted the changes and fallen in-line. This has resulted in collections far exceeding the forecasts by the ATO for the first quarter of enactment [AUD 81M (USD 56M) collected versus the AUD 17.5M (USD 12M) predicted].

So, what is the relevance of this Australian law for the rest of the world?

It all comes down to the net-benefit for governments, many of whom are laden with big payrolls to administer collection of tax on goods arriving from overseas. The traditional border collection models, still employed by many countries, are not equipped to deal with the ever-growing volume of low-value goods now moving across their borders on a daily basis.

The rapid rise of cross-border eCommerce has left many governments questioning how to update their out-dated systems, policies and processes to ensure maximum benefit of collections into the future. The Australian system is being watched closely by countries the world-over.

As stated before, New Zealand is now following suit, releasing their vendor collection model in October 2019. 

As we come up on the 12-month anniversary of the implementation of the law, the ATO are getting back on the road to share information around compliance, learnings from the last year and thoughts on the future. 

Our session is a great opportunity for you and your clients to better understand the changing landscape and what they may need to prepare for from a global perspective.

If you would like to attend one of their sessions, please visit our registration page here to check for dates and cities and to register your interest.