Given Australia’s population of 25.6 million people as of September 2020, its total $202.8 billion in 2020 imports translates to roughly $7,900 in yearly product demand from every person in Australia.
Some of Australia’s top imported goods in 2020 include – Machinery including computers, Electrical machinery, Vehicles, Mineral fuels including oil, Pharmaceuticals, Gems, precious metals, (Source: worldstopexportshttps://www.worldstopexports.com/australias-top-10-imports/# )
The bulk of these goods came from Asia (59%), Europe 19.6%, followed closely by North America with 12%.
Importing goods into Australia
Goods imported into Australia are subject to Customs control until released into home consumption or otherwise treated.
Australian Border Force is the regulator at the Australian border and requires the owner of the goods to electronically lodge an import declaration to the Integrated Cargo System.
This declaration will automatically calculate any duty, or tax payments that are required.
A freight forwarder or custom’s broker will be able to complete the declaration on your behalf.
What taxes or duties do I need to pay?
In addition to freight costs and the cost of goods there may be import duties and taxes you are required to pay.
The amount charged will depend on the type of goods you are bringing into Australia, unless an exemption or concession applies. There are exclusions and restrictions to the use of the concession.
1. Customs duty
This is a duty imposed on imported goods into Australia. Most goods imported into Australia will be charged a 5% customs duty.
This duty is determined by the classification of your goods (type) as well as any exemptions, concessions or existing free trade agreements between the countries.
It is based on the value of the imported goods (excluding freight and transport costs) in Australian dollars, calculated on the day of export of the goods (not on the day the goods arrive in Australia).
The instructions to find the exchange rate to use to determine the value of your imported goods can be found on the Australian Border Force website.
Your freight forwarder can advise you of the final customs duty for your goods.
2. Goods and Services Tax
Goods and Services Tax (GST) is payable on taxable supplies and taxable importations. The Australian Taxation Office (ATO) is the regulator of taxes in Australia and they determine which goods are taxable or exempt.
The value of the taxable importation to calculate GST is the sum of:
The customs value (CV) of the imported goods in Australian dollars, also any duty payable, the amount paid or payable to transport the goods to Australia and to insure the goods for that transport (T&I), and if applicable any Wine Equalisation Tax (WET) payable.
You will need to check with your freight forwarder for the correct amount of customs duty.
3. Wine Equalisation Tax
The Wine Equalisation Tax (WET) is payable on imported wine unless the wine is covered by an exemption.
Where imported wine is covered by an exemption, the Department provides exemption codes that can be used in the Departments systems to claim the tax exemption.
More information about the wine equalisation tax can be found here.
4. Luxury Car Tax
Luxury car tax is payable on imported luxury cars unless the car is covered by a specified Customs duty concession Item or LCT exemption.
The definition of a luxury car being “a car whose luxury car tax value exceeds the luxury car tax threshold”.
A luxury car is a car with a GST inclusive value above the LCT threshold (currently $77,565 for fuel-efficient motor vehicles and other vehicles $68,740 for 2020-21).
More information about luxury car tax can be found here.
GST on low value imported goods
Prior to 1 July 2018, imported goods with a value less than AUD $1000 were exempt from GST. However, the ATO has introduced GST applied to the sales of low value goods imported by consumers into Australia.
Goods and services tax (GST) are payable on most goods imported into Australia (taxable importations).
GST is payable before the goods are released by Customs. You as the importer pay at the same time, at the same place, and in the same manner as you would customs duty (if your goods are subject to customs duty).
The goods imported will need to be converted from your home currency to Australian dollars in order to calculate the amount of GST to be paid.
Can I claim the GST?
GST on a taxable importation is payable by businesses, organisations and private individuals, whether they are registered for GST or not.
However, if you are a GST-registered business or organisation and you import goods as part of your activities, you may be able to claim a GST credit for any GST you pay on those goods.
You must be registered for GST with the ATO and you claim your net GST every quarter, as part of your Business Activity Statement (BAS).
Can I defer the payment of GST on imported goods?
If you are an importer and are registered for GST, you may be able to defer the payment of GST by participating in the deferred GST scheme. The scheme allows you to defer the payment of GST on taxable importations until the first activity statement you lodge after the goods are imported. You will have to meet certain eligibility criteria to participate in the scheme.
Need help importing goods into Australia?
Abdera have helped many overseas businesses import goods into Australia, and we work closely with several professional freight forwarders to help our clients. Whether your business needs help to set up business in Australia or arrange for third party warehousing of your goods, we can advise the cost effective and efficient solution to match your business needs. Contact us now or call our offices on +61 2 8916 6259.
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