GST Free Sales to Overseas Customers

Sales of goods and services to overseas customers are usually considered GST-free exports under Australian tax law. This means you do not have to include GST on these sales, provided certain conditions are met. For goods, they must be exported from Australia within 60 days of receiving payment or issuing an invoice, whichever comes first. For services, GST-free status applies if:

  • The recipient is not in Australia when the services are supplied or performed;
  • The effective use or enjoyment of the service occurs outside Australia; and
  • The service is not related to work performed on tangible property in Australia or connected with Australian real property.

Examples:

  • If an overseas company sends a luxury yacht to Australia to be refurbished by an Australian marine service provider, the refurbishment work is performed on tangible property (the yacht) in Australia. Even though the client is overseas, the service is not GST-free because the work is carried out on goods physically present in Australia at the time of the service7.
  • If an Australian real estate agent manages a property in Australia for an overseas owner, the agent's services are performed on tangible property (the real estate) located in Australia, and GST applies to those services.

Important Considerations:

  • You must keep thorough records, such as export invoices, shipping documentation, and evidence of payment, to substantiate GST-free exports.
  • Goods or services that are used or consumed within Australia, or services directly related to Australian property, are not GST-free, even if the customer is overseas.
  • GST-free sales still count towards your GST turnover for registration purposes.

For more detailed information, refer to the Australian Taxation Office’s official guidance on exports and GST. GST is a complex area—it's much more than simply adding 10% to goods and services. We have extensive experience helping clients comply with GST requirements, avoid costly tax penalties from misclassification, and ensure they are not overpaying GST.

Disclaimer: The material and contents provided in this blog are general guide and informative in nature only. They are not intended to be seen as legal and tax advice. If expert assistance is required, you should seek your own advice for any legal, tax or investment issues raised in your affairs.