Software Sales Tax in Australia 🇦🇺

The sales tax system in Australia is one of the more sophisticated. So much so that the authorities will likely know when you start selling to customers in Australia and when those sales are approaching the tax threshold. 

The tax authority will notify you by post, detailing how and when to register. It’s best to be prepared when you’re approaching the threshold (currently, AUD75,000).

The process for filing & remitting sales tax in Australia is quite straightforward through the Australian Taxation Office (ATO) website.   

There is, however, some manual verification involved to check your customer’s ABN for GST exemption. 

Each time you submit tax payments to ATO, the local bank in Australia charges a fee. You should add this fee to the total you owe – otherwise you risk the payment being marked as incomplete and incurring interest charges.

While the Australian system is sophisticated and actually relatively straightforward, this also means that the authorities aren’t very forgiving to those who do get it wrong. 

The penalties range from a general interest charge for underpayment and late payment to much harsher penalties (including fines from AUS222-AUD1,100)  for those found making false statements about liabilities or failing to meet tax obligations.

The Director of the company held liable can face criminal charges if the company is found to be non-compliant. Criminal tax evasion in Australia is punishable by up to ten years in prison.