Understanding GST Registration for Your Business
We wanted to provide you with some clear insights into Goods and Services Tax (GST) registration, making sure it’s easy to understand and relevant to your business.
Why GST Registration Matters:
GST registration is essential for entities, individuals, partnerships, trusts, and companies involved in business activities. You are required to register if you are carrying on an enterprise and your annualized GST turnover is at least $75,000 (or $150,000 for non-profit bodies). This means that if you’re making taxable supplies, you need to remit GST to the ATO but can also claim GST credits on your business-related purchases.
Carrying on an Enterprise:
The term “enterprise” is broad and includes for-profit activities, commercial endeavours, and even one-off ventures related to trade, leasing, licensing, or property interests. It’s important to note that a single transaction can be considered an enterprise. If your activities meet the criteria, you must register within 21 days of hitting the mandatory turnover threshold.
Avoiding Common Pitfalls:
Some activities are excluded from being considered an enterprise, like personal hobbies or activities with no reasonable expectation of profit. Even if you don’t hit the mandatory threshold, you can still choose to register for GST. The concept of enterprise helps us navigate the complexities around when a business is considered to be in operation.
Special Considerations for the Sharing Economy:
If your business operates in the sharing economy, like Airbnb or Uber, it might still be considered an enterprise. In such cases, the ATO requires registration for GST, and keeping track of income and expenses is crucial for both GST and income tax purposes.
Pre-establishment Costs:
Companies can claim GST credits for certain costs incurred up to six months before their official registration date. This can be particularly helpful for your business in its early stages.
Understanding GST Registration Turnover:
The GST registration threshold is based on either your current GST turnover (measured on a rolling average of the last 12 months) or your projected GST turnover (measured on a prospective rolling average of the next 12 months). Turnover refers to the value of taxable supplies your business makes, excluding certain supplies that wouldn’t attract GST.
How Can We Assist You:
If you’re unsure whether your business needs to be registered for GST or if you need any assistance, please feel free to reach out. We’re here to help navigate these requirements and ensure your business complies with GST regulations.
