GST on Overseas Business Purchases - DJ Grigg Financial

Striking GST Gold: How to Handle Overseas Business Purchases Correctly

Information current as at 11 August 2026.

Buying software, subscriptions, equipment or professional services from overseas can give your business access to a wider market. However, the GST treatment is not always obvious—and an incorrect claim can turn apparent savings into a costly BAS mistake.

The golden rule is simple: do not automatically divide an overseas purchase by 11 and claim that amount as GST. Whether you can claim a GST credit depends on what you purchased, how GST was collected and whether you hold the required evidence.

Key Takeaways

Australian GST is not automatically included in an overseas purchase.

GST-registered Australian businesses generally should not be charged GST on imported services, digital products or low-value goods acquired for business use.

Goods with a customs value above A$1,000 may attract GST at the Australian border.

Foreign VAT, sales tax and other overseas taxes are not Australian GST and cannot be claimed at label 1B of your BAS.

“No GST” and “GST-free” are not interchangeable terms.

A GST credit is not automatic merely because “GST” appears on a receipt.

Reverse-charge GST may apply if you would not have been entitled to a full GST credit.

Can you claim GST on an overseas business purchase?

You can generally claim a GST credit only when Australian GST was properly payable, the purchase was made for a creditable business purpose, you are registered for GST and you hold the required evidence.

Australian GST may be collected in one of two main ways:

By an overseas supplier, electronic distribution platform or redeliverer at the point of sale.
By Australian Border Force when physical goods enter Australia.

If no Australian GST was charged or paid, there is generally no GST credit to claim.

The ATO explains:

“You can claim a credit for any goods and services tax (GST) included in the price you pay for things you use in your business.”

Source: Australian Taxation Office

Start by identifying what you purchased

Different rules apply to different types of overseas business purchases.

Type of purchase	How Australian GST may apply	What the Australian business should check
Imported software, subscriptions, digital products or services	The overseas supplier may charge GST to Australian consumers, but generally not to a GST-registered Australian business buying for business use	Was your ABN supplied, was GST registration confirmed and is the purchase for business use?
Physical goods with a customs value of A$1,000 or less	GST may be collected at checkout on sales to Australian consumers	Confirm whether the platform treated you as a GST-registered business purchaser
Physical goods with a customs value above A$1,000	GST may be payable at the border as part of a taxable importation	Retain the import declaration and evidence showing your business as the importer
Purchase used partly privately or to make input-taxed supplies	Reverse-charge or apportionment rules may apply	Calculate the creditable business-use portion and consider specialist advice
Invoice showing foreign VAT or sales tax	This is generally not Australian GST	Do not claim the foreign tax as a GST credit on your BAS

Imported software, digital products and professional services

Common overseas purchases include:

Software-as-a-service subscriptions.
Cloud storage and web hosting.
Online advertising.
Design and marketing services.
Digital publications.
Apps, plugins and downloadable products.
Consulting and professional services.

If your Australian business is registered for GST and acquires imported services, digital products or low-value goods for business use, the ATO says you generally should not be charged Australian GST.

To help the supplier apply the correct business-to-business treatment, provide:

Your Australian Business Number.
Confirmation that your business is registered for GST.
Confirmation that the purchase is for business use.

The ATO’s advice is direct:

“If you are an Australian GST-registered business … you shouldn’t be charged GST.”

Source: Australian Taxation Office

Many online platforms allow businesses to enter their ABN and GST-registration status in their billing or tax profile. Doing this before the next invoice is issued can prevent incorrectly charged GST and make your bookkeeping cleaner.

Think of your billing profile as the hallmark on a piece of gold: it helps establish what the transaction really is before it reaches your accounts.

What if an overseas supplier charges Australian GST?

Do not assume that an amount described as “GST” can automatically be claimed.

First, check:

Did you provide your ABN?
Did you confirm that you are GST-registered?
Was the purchase made for business use?
Does the document show Australian GST rather than foreign VAT?
Does the supplier have an ABN?
Was the GST collected by an electronic marketplace rather than the individual seller?
Do you hold a valid tax invoice where one is required?

For purchases costing more than A$82.50 including GST, a valid tax invoice is generally required before a GST credit can be claimed, subject to limited exceptions.

If GST was charged after you correctly identified yourself as a GST-registered business purchaser, contact the supplier or platform and request a refund. This will usually be safer than assuming the amount can be claimed.

Source: ATO guidance on tax invoices.

ABNs, ARNs and overseas suppliers

ABN Lookup can help verify an Australian Business Number, but it does not identify every overseas business registered to collect Australian GST.

Some non-resident suppliers use the ATO’s simplified GST registration system. These businesses:

Do not need an ABN.
Receive an ATO Reference Number, or ARN.
Cannot issue a valid Australian tax invoice unless they also have an ABN.
Use simplified registration primarily to collect and pay GST on eligible consumer sales.

This means that not finding an overseas supplier through ABN Lookup does not necessarily prove that it is unregistered. It does, however, mean you should investigate carefully before claiming any GST shown on the receipt.

Source: ATO guidance on simplified registration.

ABN Lookup: https://abr.business.gov.au/

GST on low-value imported goods

Low-value imported goods generally have a customs value of A$1,000 or less.

For sales to Australian consumers, GST-registered overseas merchants, electronic distribution platforms or redeliverers may collect GST at checkout. However, a GST-registered Australian business acquiring the goods for business use should generally not be charged GST after providing the required business information.

The A$1,000 test is based on customs value, not necessarily the final checkout total. Transport and insurance charges are generally excluded when determining whether goods meet the low-value threshold.

Source: Australian Border Force guidance.

Example: low-value business equipment

A GST-registered Victorian business buys A$700 of specialised equipment from an overseas marketplace for business use.

The business provides its ABN and confirms its GST-registration status at checkout. The platform does not charge Australian GST.

Because no Australian GST was included in the purchase price or paid at the border, the business does not claim a GST credit. The purchase should be recorded using the appropriate no-GST tax treatment—not automatically described as GST-free.

Goods valued above A$1,000

Physical goods with a customs value above A$1,000 are generally dealt with through the border-importation system rather than the low-value point-of-sale rules.

GST on a taxable importation is 10% of the value of the taxable importation, which may include:

The customs value of the goods.
Customs duty.
International transport and insurance.
Wine Equalisation Tax, where applicable.

Australian Border Force describes the calculation as:

“Customs Value + Duty + Transport and Insurance + Wine Equalisation Tax.”

Source: Australian Border Force

Goods over A$1,000—and certain goods such as alcohol and tobacco regardless of value—may also attract customs duty, import processing charges and other taxes.

Example: machinery imported for the business

A GST-registered business imports machinery with a customs value of A$12,000. The overseas supplier’s invoice contains no Australian GST.

GST may nevertheless be payable when the machinery enters Australia. If the business is the importer, uses the machinery for a creditable business purpose and holds the necessary importation documents, it may be entitled to claim the import GST as a GST credit.

The absence of GST from the supplier invoice does not prevent a credit where GST was properly paid on the taxable importation.

You must be the importer to claim import GST

Paying or reimbursing import charges does not necessarily make your business entitled to the GST credit.

The ATO states:

“You must be the importer of the goods to claim GST credits.”

Source: Australian Taxation Office

In broad terms, the business claiming the credit should have caused the goods to be brought to Australia for its own purposes and be shown as the owner or importer on the import declaration.

Retain:

The overseas supplier’s invoice.
The import declaration.
Australian Border Force payment records.
Customs broker or freight-forwarder statements.
Freight and insurance documentation.
Evidence identifying your business as the importer.
Evidence of the business purpose of the purchase.

These records are the nuggets that support the GST credit if the ATO later examines the claim.

Foreign VAT and sales tax are not Australian GST

Overseas invoices may show:

Value Added Tax or VAT.
State sales tax.
Provincial tax.
Consumption tax.
Goods and services taxes imposed by another country.

These taxes are not Australian GST and cannot be claimed as GST credits at label 1B of an Australian BAS.

Depending on the circumstances, the foreign tax may form part of the cost of the purchase for accounting or income-tax purposes. In some countries, it may also be possible to seek a refund from the overseas revenue authority. That treatment should be reviewed separately from your Australian GST position.

“No GST” does not necessarily mean “GST-free”

“GST-free” has a specific meaning under Australian GST law. It applies to particular supplies, such as many basic foods, specified health services and certain exports.

An overseas purchase with no Australian GST is not automatically a GST-free purchase. It may instead be:

Outside the Australian GST system.
A transaction on which no Australian GST was charged.
A non-taxable importation.
Subject to reverse-charge rules.
A purchase involving foreign tax rather than Australian GST.

If no Australian GST was included and no GST was paid on a taxable importation, generally record the transaction using the appropriate no-GST treatment in your accounting system. The correct code can depend on whether the purchase is an expense, inventory item or capital acquisition and on the software and BAS-reporting method used.

When can reverse-charge GST apply?

In some circumstances, the Australian purchaser must account for GST even though the overseas supplier did not charge it. This is known as a reverse charge.

It may apply where:

You are registered or required to be registered for GST.
You acquire relevant offshore goods, services or digital products.
The acquisition is not GST-free.
You would not have been entitled to a full GST credit if GST had been charged.

This is most relevant where the purchase is:

Partly for private use.
Connected with input-taxed financial supplies.
Related to residential property activities.
Otherwise subject to restricted GST-credit entitlement.

Example: mixed business and private use

A GST-registered business purchases an overseas software subscription that is used 70% for business and 30% privately. The overseas supplier correctly does not charge GST.

Because the business would not have been entitled to a full GST credit if GST had been charged, the reverse-charge rules may need to be considered. This is not a situation where “no GST on the invoice” necessarily means “nothing to report”.

Source: ATO reverse-charge guidance.

Overseas-purchase GST checklist

Before claiming GST on an overseas business purchase, ask:

Is the business registered for GST?
Was Australian GST actually charged or paid?
Is the amount Australian GST rather than foreign VAT or sales tax?
Was the purchase made wholly or partly for business use?
Does the purchase relate to making input-taxed supplies?
Did the business provide its ABN and GST-registration status?
Is there a valid tax invoice where one is required?
For imported goods, is the business the importer shown in the supporting documents?
Was GST collected at checkout or paid at the border?
Could the reverse-charge rules apply?
Has any private or non-creditable use been correctly apportioned?
Has the transaction been assigned the appropriate accounting-software tax code?

Frequently asked questions

Do all overseas purchases have no GST?

No. Australian GST may be collected at checkout or when physical goods enter Australia. The correct treatment depends on the type and value of the purchase and the purchaser’s GST status.

Can I claim one-eleventh of every overseas business expense?

No. You can generally claim only Australian GST that was properly included in the price or paid on a taxable importation, subject to the normal GST-credit rules.

Should an overseas supplier charge my GST-registered business GST?

For imported services, digital products and low-value goods acquired for business use, generally no—provided you supply your ABN and confirm that you are GST-registered.

Can I claim foreign VAT on my Australian BAS?

No. Foreign VAT, sales tax and similar overseas taxes are not Australian GST.

Can I claim GST paid by my customs broker?

Possibly, but only if your business is the relevant importer and otherwise satisfies the GST-credit requirements. Retain the import declaration and supporting records.

What if I have already claimed GST incorrectly?

The error may need to be corrected in a current or revised BAS, depending on its nature, value and timing. Seek advice before making the correction.

Source: ATO guidance on correcting BAS mistakes.

Give your overseas purchases the gold-standard GST treatment

Overseas transactions can easily be misclassified when software relies on automatic bank rules, receipt scanning or default tax codes. A receipt that appears straightforward may involve low-value goods rules, border GST, foreign VAT, mixed use or reverse-charge obligations.

DJ Grigg Financial can help you review overseas expenses, confirm GST-credit entitlements, correct transaction coding and ensure your BAS is supported by the right records.

Don’t let an incorrect GST code tarnish your business records. Contact DJ Grigg Financial to give your overseas purchases—and your next BAS—the gold-standard review they deserve.

General information only: This article does not constitute tax, legal or customs advice. GST treatment depends on the facts of each transaction. Seek professional advice for your circumstances.and tax return.