GST on International Trade
Importing and exporting goods and services has specific GST rules in Australia and New Zealand. Understanding these rules is critical for international businesses to ensure compliance, claim correct GST credits, and price competitively. This guide covers export zero-rating, import GST obligations, documentation requirements, and common cross-border scenarios.
📘 Key Principle:
Exports are zero-rated (0% GST) to make your products competitive internationally. Imports are taxed to ensure fair competition with locally-produced goods. This applies in both Australia and New Zealand.
Exports: Zero-Rated GST (0%)
What Does "Zero-Rated" Mean?
Zero-rated supplies have 0% GST charged to the customer, but the supplier can still claim GST credits on related expenses. This is different from "GST-free" or "exempt" supplies.
| Treatment | GST on Sale | Can Claim Input Credits? | Example |
|---|---|---|---|
| Zero-Rated (0%) | 0% | ✅ Yes | Exports |
| GST-Free | 0% | ✅ Yes | Basic food (AUS only) |
| Exempt | 0% | ❌ No | Residential rent, financial services |
| Taxable (Standard) | 10% or 15% | ✅ Yes | Domestic sales |
🇦🇺 Australia - Export Requirements
Exports are zero-rated if:
- Goods are physically exported from Australia
- Exported within 60 days of supply
- Proper export documentation maintained
Required documentation:
- Export declaration (customs documents)
- Bill of lading or airway bill
- Commercial invoice showing 0% GST
- Proof of payment from overseas customer
Services exported:
- Services performed outside Australia, or
- Services consumed outside Australia (e.g., consulting for overseas client)
- Recipient must be outside Australia
🇳🇿 New Zealand - Export Requirements
Exports are zero-rated if:
- Goods physically removed from New Zealand
- Exported within 28 days of supply
- Documentation proving export maintained
Required documentation:
- Customs export entry
- Shipping/freight documents
- Invoice showing zero-rating
- Evidence goods left NZ
Services exported:
- Services physically performed outside NZ
- Recipient is a non-resident outside NZ
- Must not be consumed in NZ
Imports: GST Payable
🇦🇺 Australia - Import GST
When GST applies:
- All imported goods valued over $1,000 AUD
- Goods under $1,000: May have GST via online seller or at border
How GST is charged:
- At the border: Customs collects GST on goods value + freight + insurance
- Calculation: (Customs value + Freight + Insurance + Duty) × 10%
- Payment: Before goods released from customs
Example:
- Goods value: $10,000 USD = $15,000 AUD
- Freight: $1,000 AUD
- Duty (5%): $800
- GST base: $15,000 + $1,000 + $800 = $16,800
- GST payable: $16,800 × 10% = $1,680
Deferred GST Scheme:
- Available for registered GST businesses
- Pay GST on next BAS instead of at border
- Improves cash flow (don't pay upfront)
- Apply through ATO
🇳🇿 New Zealand - Import GST
When GST applies:
- All imported goods valued over $1,000 NZD
- Goods under $1,000 from overseas suppliers: GST collected by supplier if registered
How GST is charged:
- At the border: Customs collects 15% GST
- Calculation: (Customs value + Freight + Insurance + Duty) × 15%
- Payment: Via Customs invoice before clearance
Example:
- Goods value: $8,000 NZD
- Freight: $500 NZD
- Duty (10%): $850
- GST base: $8,000 + $500 + $850 = $9,350
- GST payable: $9,350 × 15% = $1,402.50
Approved Importer Regime:
- For regular importers
- Defer GST payment to GST return
- Better cash flow management
- Apply through Customs
Common Export/Import Scenarios
Situation: You manufacture widgets in Australia, sell to US customer for USD $10,000.
GST Treatment:
- Invoice: USD $10,000 + 0% GST = USD $10,000 (zero-rated export)
- Keep: Shipping docs, customs export declaration
- BAS reporting: Include in G2 (export sales)
- Can claim: GST on manufacturing costs (input credits)
Advantage: Your price is 10% more competitive vs domestic Australian suppliers who must charge GST.
Situation: Import electronics from China worth NZD $50,000 + $2,000 freight.
GST Calculation:
- Goods value: $50,000
- Freight: $2,000
- Duty (assume 5%): $2,600
- Subtotal: $54,600
- GST payable: $54,600 × 15% = $8,190
Cash Flow Options:
- Pay $8,190 at border (standard)
- OR use Approved Importer Regime: Defer to next GST return
Can claim back: $8,190 GST credit on next GST return (if GST-registered)
Situation: Australian consultant provides services to UK company (work done remotely from Australia).
GST Treatment:
Australia:
- Zero-rated if service consumed outside Australia
- Invoice: AUD $10,000 + 0% GST
- Evidence needed: Contract showing overseas client, consumed in UK
New Zealand:
- Similar rule: Zero-rated if non-resident recipient and not consumed in NZ
- Evidence: Client details, nature of service, where performed
Important: If service performed in Australia/NZ and consumed locally (e.g., on-site consulting), standard GST applies even if client is overseas.
Situation: Australian business sells online, supplier ships directly from China to Australian customer.
GST Treatment:
- This is an import (goods entering Australia)
- Standard domestic sale to Australian customer: 10% GST applies
- Import GST paid at border (or by supplier if low-value)
- Invoice customer: Price + 10% GST
Not an export because goods don't physically leave Australia—they arrive in Australia for local customer.
Documentation Checklist
For Exports (Must Keep):
- ✅ Export declaration / Customs entry
- ✅ Bill of lading / Airway bill
- ✅ Commercial invoice (showing 0% GST)
- ✅ Proof of payment from overseas buyer
- ✅ Contract or purchase order
- ✅ Evidence goods left country (tracking, delivery confirmation)
For Imports (Must Keep):
- ✅ Import declaration / Customs clearance
- ✅ Commercial invoice from supplier
- ✅ Freight/shipping invoices
- ✅ Duty and GST payment receipts
- ✅ Currency conversion records
Common Mistakes to Avoid
❌ Errors That Trigger Audits:
- Claiming zero-rating without documentation: Must prove goods actually exported
- Missing 60/28-day export deadline: Goods not exported in time = standard GST applies
- Incorrect service export claims: Service consumed locally isn't an export
- Not paying import GST: Customs will hold goods until paid
- Forgetting to claim import GST credits: You can claim back GST paid on imports
- Wrong currency conversions: Use official exchange rates (RBA/RBNZ)
Special Cases
Digital Services to Overseas Customers
Software, e-books, online courses sold to overseas customers:
- Australia: Zero-rated if customer is outside Australia and not consumed in Australia
- New Zealand: Zero-rated if supplied to non-resident and consumed outside NZ
Evidence needed: Customer location (IP address, billing address), subscription records
Re-Exports (Imported then Exported)
Scenario: Import goods, add value, then export.
- Import: Pay GST at border (or defer)
- Processing: Claim GST credit on import + local costs
- Export: Zero-rated sale
Net effect: GST-neutral (paid on import, claimed back, none charged on export)
Cash Flow Management Tips
💰 Optimize Import/Export Cash Flow:
- Deferred GST schemes: Apply for import deferral (pay on BAS/GST return, not at border)
- Frequent BAS lodgment: Monthly returns = faster GST refunds on exports
- Plan import timing: Import near quarter-end to claim credits sooner
- Keep export docs ready: Delays in proving export = delayed refunds
- Use freight forwarders: They handle customs paperwork efficiently