If your foreign-owned business operates in Australia, understanding how Goods and Services Tax (GST) works is essential. Registering for GST not only helps you meet your tax obligations but may also allow you to recover GST paid on eligible business expenses through GST credits. However, not every purchase qualifies, and failing to meet the requirements can result in denied claims.
When does an international business need to register for GST?
An international business must register for GST if it carries on an enterprise connected with Australia and its GST turnover reaches or is expected to reach $75,000 or more in a 12-month period. Businesses that become liable to register must do so within 21 days.
Some non-resident businesses are also required to register depending on the nature of their Australian activities, such as selling goods or services connected with Australia. Before registering for GST, you must first obtain an Australian Business Number (ABN).
Businesses with turnover below the registration threshold may choose to register voluntarily. Voluntary registration can benefit businesses that regularly incur GST on Australian business expenses because it enables them to claim eligible GST credits. However, businesses that register voluntarily are generally required to remain registered for at least 12 months.
When can you claim a GST credit?
You can claim a GST credit when you purchase goods or services for your business and GST is included in the purchase price. To claim an input tax credit through your Business Activity Statement (BAS), you must satisfy all of the following requirements:
You are registered for GST.
The purchase is used wholly or partly for your business.
The purchase does not relate to making input-taxed supplies.
GST was included in the purchase price.
You paid, or are liable to pay, for the purchase.
You hold a valid tax invoice for purchases exceeding $82.50 (including GST).
For purchases costing $82.50 or less, a receipt, cash register docket, invoice, or other appropriate purchase record is generally sufficient. If a purchase is used for both business and private purposes, you can only claim the GST credit for the business-use portion. For example, if an expense is used 60% for business activities, only 60% of the GST paid is claimable.
Foreign-owned businesses should also confirm that their supplier is registered for GST. If the supplier is not registered or not required to register, they cannot charge GST, meaning no GST credit can be claimed.
Generally, GST included in a purchase can be calculated by dividing the GST-inclusive price by 11. The total GST credits you claim can offset the GST you owe to the Australian Taxation Office (ATO), the principal revenue collection agency for the Australian government. If your GST credits exceed the GST payable, you may receive a refund.
A four-year time limit applies to claiming GST credits, making accurate record-keeping essential.
When can you not claim a GST credit?
You cannot claim a GST credit if you do not meet the eligibility requirements, even if you paid GST on a purchase.
You cannot claim GST credits if:
You are not registered for GST.
The purchase did not include GST.
The supplier was not registered or required to register for GST.
You do not hold a valid tax invoice for purchases over $82.50 when lodging your BAS, unless a limited exception applies.
The four-year claim period has expired.
You also cannot claim GST credits for certain types of purchases, including:
Private or domestic expenses.
Purchases relating to making input-taxed supplies, such as residential rental properties.
Wages paid to employees, as wages are not subject to GST.
Real property acquired under the margin scheme.
Certain entertainment expenses that are not deductible for income tax purposes.
The portion of a passenger vehicle purchase that exceeds the applicable car limit.
In addition, GST credits are unavailable on GST-free purchases, such as many basic food items, or on input-taxed transactions, including most residential accommodation, bank fees, and loan interest.
How ABN Australia can help
Expanding into Australia comes with a range of GST and tax compliance obligations. ABN Australia can help you register your company, determine whether your foreign-owned business needs to register for GST, assist with obtaining an ABN, and support your ongoing BAS and tax compliance requirements. Drawing on more than 50 years of experience supporting businesses in Australia, our team can help you navigate the registration process and meet your ongoing compliance obligations with confidence. Speak with our team for expert assistance.
Last updated: 15th July 2026
About the Author
Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.
Ro Elvinia
Customer Success and Marketing Manager