Running a foreign-owned e-commerce business in Australia

Overseas online sellers can reach Australian customers without an Australian company. Australian GST applies to low value goods (A$1,000 or less) sold from offshore, and the seller or the marketplace collects it. The calculation changes once you hold stock in an Australian warehouse, employ people here, or want a local entity your customers, payment providers and suppliers can contract with. At that point most sellers form a Pty Ltd, which brings the resident director requirement with it.

Stage one: selling from offshore

Since 1 July 2018, a non-resident business that sells goods with a customs value of A$1,000 or less to Australian consumers has had to charge GST and pay it to the ATO, once its sales connected with Australia reach the registration threshold. The ATO defines customs value as the sale price minus freight and insurance from the place of export. GST, however, is charged on the full price the customer pays, delivery included.

The ATO's own example: an Italian seller ships jeans to an Australian customer for A$350, of which A$50 is shipping and insurance. The customs value is A$300, which makes the jeans low value goods, and GST is charged on the whole A$350.

The consignment exception

If several low value items are shipped together in one consignment worth more than A$1,000 in total, the seller doesn't charge GST at checkout. The goods are taxed at the border instead. This turns on how you actually ship. In the ATO's necklace example, two A$750 items shipped in one package are taxed at the border, but the same items sent in two packages would each have attracted GST at the point of sale. Your checkout logic has to know your fulfilment logic.

Goods over A$1,000 per consignment, and alcohol and tobacco, are dealt with at the border with GST, duty and clearance charges falling on the importer.

Marketplaces carry the GST for you, mostly

The ATO calls marketplaces and app stores electronic distribution platforms (EDPs). An EDP operator is generally responsible for GST on a sale of low value imported goods to a consumer if it is registered or required to be registered for GST and either it or the merchant helps get the goods to Australia. The platform is then treated as the supplier for GST.

For you as a merchant, that has two effects:

• you don't return the GST on those sales
• those sales don't count when working out whether you have to register.

The operator is not responsible where the merchant is identified as the supplier on the customer's document, the two have agreed in writing that the merchant pays the GST, and the platform controls none of the charging, delivery or terms of sale. Classified-ad sites are the usual example. Check which model each channel uses before assuming GST is handled.

Stage two: stock held in Australia

Many sellers move inventory into an Australian third-party logistics warehouse to offer faster delivery. That changes the GST position in two ways.

First, the goods become imports. GST is generally payable on taxable importations, collected by the Department of Home Affairs at 10% of the value of the taxable importation. That value is the customs value plus any duty, transport to Australia and insurance. Normally it must be paid before Home Affairs releases the goods.

Second, sales from the warehouse are sales of goods already in Australia, not low value imports. The ATO states that simplified GST registration is not available to a non-resident that imports goods and warehouses them here before selling, whether directly or through a marketplace. Standard registration is needed, which also lets the importer claim GST credits on what it paid at the border.

A GST-registered importer may be able to join the deferred GST scheme. That pushes payment of import GST out to the first activity statement after the goods arrive, where the matching credit can usually be claimed. Eligibility criteria apply, and your customs broker and tax agent will know whether you qualify.

The registration routes and turnover tests themselves are set out in our GST registration guide, so we won't repeat them here.

Why sellers form a local Pty Ltd

A foreign company can register for GST without an Australian entity. These are the usual reasons sellers form one anyway:

• Importer of record. A local company can hold the stock, be the importer, claim import GST credits and sit inside the deferred GST scheme.
• Hiring. Customer service, warehouse or marketing staff in Australia bring PAYG withholding, super and possibly payroll tax. See hiring employees.
• A local contracting party. Australian customer terms, supplier contracts and the warehouse agreement can sit with the Australian entity rather than the global group.
• Banking and payments. A local entity with an ABN can open an Australian account and settle in AUD. Our banking guide covers bank checks on overseas-controlled companies.

Once you form a Pty Ltd, it needs at least one director who ordinarily resides in Australia (Corporations Act s201A), a registered office and an annual ASIC review fee, currently $342 for a proprietary company. The cost calculator adds up the first year.

Tax points specific to retail groups

• The 25% rate is often out of reach. An Australian company's eligibility for the 25% base rate entity rate depends on aggregated turnover, and the ATO counts the turnover of connected foreign entities. A small Australian arm of a large overseas retailer usually pays 30%. Our company tax guide explains the test.
• Transfer pricing. When the Pty Ltd buys stock from the parent, the price sets how much profit stays in Australia. Agree and document it with your adviser.
• GST arrears follow directors. Unpaid GST is one of the amounts directors can become personally liable for under the director penalty regime. A resident director will want to see BAS lodged and paid on time.

Mistakes that are easy to make

• Turning on a "ship to Australia" option without deciding who returns the GST.
• Moving stock into an Australian warehouse while keeping simplified GST registration.
• Assuming the marketplace handles GST on every channel, including the brand's own website.
• Forming a Pty Ltd with overseas directors only, which leaves it out of compliance with s201A from day one.

How we help e-commerce groups

We provide the Australian-resident director and run the ASIC side of compliance: annual review, solvency resolution, officeholder changes and registered office. Appointment is typically within 5 business days of completed checks, and we can incorporate the company for A$490 plus the ASIC fee. We don't handle customs, GST lodgement or tax advice, and we work alongside your broker and accountant. Package pricing starts at A$3,400 a year ex GST; see pricing.

General information, current at 27 October 2026. It isn't legal, tax or customs advice, so check your own position with a qualified adviser.

General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.