3 Steps To Filing GST For Your Small Business In 2022

If you are jumpstarting a business or currently running one, you must learn the legal responsibilities that come with it. Taxes are among these duties, and it’s essential to have them filed and paid annually and on time. One is the GST or Goods and Services Tax, a simplified taxation system introduced in 2017. This article will further provide information on filing GST for your business to keep your tax responsibilities updated and in compliance with the law.

  1. Determine Where Your Customer Base Lives

There are two forms of tax systems, GST and HST. The latter stands for harmonized sales tax (provincial sales tax), and what to charge for your products and services will depend on the location of your customers. Companies have two routes to choose when charging their customers GST. Some will charge them immediately to speed up growth, while others set it aside for later. For the latter, these companies set up a targeted amount generated for the last few consecutive quarters before applying the tax.

Likewise, when to charge the tax will also be based on the identity of the customers and if they can claim a tax refund. A business owner might not charge a customer a GST tax until they can because individual customers won’t be able to claim the tax. But consultants will be able to charge corporate clients the GST as soon as possible because the corporation can look at it as an input tax credit that they can refund. Business owners can use tax calculators and other helpful calculators online to find out how much GST they will potentially pay.

  1. Find Out When To Register For GST

Check each month to see if you have reached the threshold if you’re not registered for GST yet. Once it exceeds this threshold, you must register for your GST turnover in 21 days. In addition, you can also calculate your GST dues using a GST calculator. Here are the following conditions of when to register for the tax system:

  • When you begin a business and you’re expecting your GST to reach the threshold and beyond during the first year of operation.
  • When the business has reached a turnover of AUD$75,000 or more. (It is the gross income for all companies, excluding the GST)
  • If you have an existing business that has reached the threshold.
  • When you can provide transportation for passengers regardless of the GST turnover. It applies if you rent or lease a taxi or if the owners are both drivers.
  • If you’re claiming fuel tax credits for your business or company.
  • If the organization reaches a turnover of AUD$150,000 annually or more.

In Australia, if your business doesn’t fit into any of the mentioned categories, the GST registration is optional. But if you do choose to register, make sure to stay registered for at least 12 months.

  1. Register For GST 

If your business is new, you need an Australian Business Number or ABN to register for the GST. You can head over to the official website for ABN registration. The registration process also allows you to register for the goods and services tax. The ABN is the same as the GST registration number since the ABN is part of the GST system.

The Australian government offers foreign businesses ways to register: the standard and the simplified method. Both options have pros and cons that you should know. The simplified way is specifically for international businesses wanting to operate in Australia.

The simplified system allows business owners to register and pay for GST online. It also helps them manage their accounts and safely authorize key personnel access to them. However, it is not for claiming input tax credits. Here are the terms for using the simplified method:

  • There’s no need for you to provide proof of identity
  • You will use an ATO Reference Number instead of an ABN
  • GST returns must be filed and paid quarterly
  • You won’t be able to issue tax invoices
  • You can pay using a SWIFT bank transfer or credit card

Here are the steps to the simplified registration:

  • Set up your AUSid. It is the account set up by the Australian to allow non-residents access to online registration.
  • Log into the ATO (Australian Taxation Office) website and look for online services for non-residents.
  • Register for GST by following the instructions.

ATO will send you a reference number which consists of a 12-digit identifier. You will also receive a payment reference number.

To register for the Standard method:

  • Apply for an Australian Business Number (ABN) and register for GST if you haven’t yet
  • Once you have an ABN, register for a GST through the Business Portal online, or call by phone using 13 28 66 or by a registered tax agent.

In Conclusion

The Australian government makes it easy for residents and non-residents to register for good and services tax. It allows business owners to keep up to date with their tax obligations to operate without further worries. National and foreign businesses can choose to register online or by an agent if they’re a citizen.