There are two different organisations that are involved the Australian Competition and Consumer Commission - ACCC and the Australian Tax Office - ATO.
There are specific requirements in Australia regarding the collection of tax and Goods and Services Tax (GST) and not every product needs GST added, and not every business has to collect GST. In order to get it right you need to take advice from your accountant or tax adviser. Never act on advice from social media forums, friends or acquiescence's until you have verified it with an accredited tax adviser. If their advice is not correct it can leave you with legal and tax problems, and maybe even fines.
If your business is registered for GST in Australia and you are selling to consumers then as a general principle you need to show prices including GST on your online store.
Following is a excerpt from the ACCC website regarding showing prices:
What should the price show?
At both the time of advertisement and at sale, products and services must clearly display a ‘single price’ which is the minimum total cost that is able to be calculated. This should include:
- the price of all aspects of the final product and service
- all taxes, duties and extra fees.
The single price must be at least as prominent as any other price displayed. This means you should be able to identify the total price in the advertisement just as easily as the prices for all the other aspects. For example, the price of a vehicle being advertised should be inclusive of all costs, including stamp duty.
Where different multiple prices appear for one product or service, businesses must withdraw those products and services and fix the display or advertisement. There are exceptions when the advertisement states that prices vary in different regions, where a price is entirely hidden by another price, a unit price is shown, or a price is displayed in an overseas currency.
If you choose an item or service that has multiple different prices displayed or advertised and the business can’t withdraw the product or service from sale and fix the error, you are entitled to buy it for the lowest price.
Are there other price issues that are important?
Showing prices online is not just about including or excluding GST but you must also not show prices that might mislead consumers or the visitors to your online store. The ACCC website information about Price Displays also contains information regarding the use of "marked down" prices or "RRP" prices.
Again from the ACCC website:
Misleading prices may include:
- a ‘before’, ‘was’ or ‘strikethrough’ price that is higher than the price those goods would have been purchased for during a reasonable period immediately before the sale period started
- a comparison between ‘cost’ and ‘sale’ prices if the ‘cost’ price is greater than what the business paid for the goods
- a price comparison with a competitor’s price for identical goods, but the stated price is taken from a different market or geographical location
Businesses may also mislead consumers about prices if they:
- advertise or promote ‘savings’ or ‘discounts’ in comparison to the recommended retail price (RRP) but the goods had never been previously sold at RRP, or the RRP does not reflect a current market price
- promote a ‘sale’ or ‘special’ price which is not in fact a temporary sale price, thus creating an unwarranted sense of urgency to make an immediate purchase
- represent that an advertised price is the total price that you will have to pay when it is not.
Excerpt from ACCC - http://www.accc.gov.au/consumers/prices-receipts/price-displays.
Standard layouts for invoices
There are also standard ways to layout invoices and those standards apply to online and offline invoices. The ATO provides a comprehensive guide to the layout of invoices.
If you are selling into multiple countries then you may not need to add tax in some countries where you do not have a business entity. This will mean that prices may vary based on the country location of the buyer. This will require a more complex tax matrix to be setup.
So the tax charged will vary depending on the type of products being sold and the country location of the buyer. eCommerce systems will enable you to setup multiple "tax areas" and assign those to countries; and to also setup multiple "tax classes". You can assign products to a specific tax class. The tax area is based on the visitors location or shipping address. The tax that is applicable may also vary if the shipping address is a different tax area to the billing address.
See the following example from an ePages management back office screen:
Our advice is to always go to a accredited tax adviser that has experience in the tax jurisdiction you are selling to.
NOTE: This is not offered as tax advice and we are not tax advisers, please always seek final tax information from your accountant or tax adviser.