Get started with Paddle 🙌 Before giving you access to a Paddle account and demo, we need to verify whether we can support you. To get started, please fill in this form for our risk team to review.

Software Sales Tax in Australia 🇦🇺

How do I solve my tax liability?
Agony Rating
Sales Tax Rate
Taxable Goods
Highest Penalty

How likely am I to get caught for owing sales tax in Australia?

Quite likely. If you’re a B2C business selling software to customers in Australia, you’ll owe tax when sales there exceed AUD75,000 per year.

What is the sales tax threshold in Australia?

Based outside of Australia: Sales exceeding AUD75,000 per year Based in Australia: Sales exceeding AUD75,000 per year.

Is SaaS taxable in Australia?

Yes. You owe tax for the sale of cloud software subscriptions to customers in Australia.

Are software downloads taxable in Australia?

Yes. You owe tax for the sale of software downloads to customers in Australia.

Are eBooks taxable in Australia?

Yes. You owe tax for the sale of eBooks to customers in Australia.

Are digital downloads taxable in Australia?

Yes. You owe tax for the sale of digital downloads to customers in Australia.

Registering for GST in Australia

😐🌶️ It's not that complicated

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).

Filing & Remittance of GST in Australia

😐🌶️ It's not that complicated

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.

Penalties for GST non-compliance in Australia

😩🌶️🌶️🌶️ It's crippling to the business / person

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.

Had enough yet? There's more…

How to become sales tax compliant globally 🗺

Three Routes to Compliance for SaaS Executives

SaaS executives have a choice of three routes to global tax compliance. Get the guide to walk through the options for your team.

Download the guide »

Don't Worry, Ask Hugo

As CFO of Paddle, Hugo's finance team manages global tax compliance for $100M's of ARR from over 2,000 software businesses. Ask your questions in our live webinar.

Register here »

How can Paddle help?

Paddle can take all your responsibility & liability for sales tax off-your hands. Our global entities, finance team, and $160k+ year spend on agents, tooling, and accountants is ready for you.

Learn more »