Do I Charge GST to Overseas Customers? 2026 Guide

Updated for the 2026–27 financial year

GST is charged at a rate of 10% on most goods and services sold in Australia, but certain sales to overseas and non-resident customers can be GST-free, meaning no GST is added to the price. Whether you charge GST depends on what you are selling, where your customer is, where the goods or service end up being used, and whether the supply is connected with goods or real property in Australia. This guide walks you through the rules clearly so you can apply the right treatment with confidence.

What This Guide Covers

• Do You Charge GST to Overseas Customers?
• Quick Decision Checklist: Should I Charge GST?
• GST Treatment by Scenario: A Quick Reference Table
• What Is a GST-Free Supply?
• Exporting Goods to Overseas Customers
• Providing Services to Non-Resident Customers
• Supplying Rights and Intellectual Property Used Overseas
• When GST-Free Rules Do Not Apply
• Can You Still Claim GST Credits on GST-Free Export Sales?
• Do You Still Need to Register for GST?
• Reporting GST-Free Sales on Your BAS
• Records the ATO Requires to Support a GST-Free Claim
• Frequently Asked Questions
• Get Help With GST on Overseas Sales

Do You Charge GST to Overseas Customers?

Many sales to overseas and non-resident customers can be GST-free, but conditions apply, and the treatment is not automatic just because the customer is located in another country. GST is applied at 10% to most goods and services sold in Australia. The law then carves out specific situations where a sale is GST-free, which is a defined category that includes exports and certain services and rights supplied to non-residents.

The important distinction is between GST-free treatment and the idea of “avoiding” GST. GST-free is a legitimate, well-defined treatment under the GST law. When a product or service is GST-free, you do not include GST in the price, and you can still claim credits for the GST included in the price of the purchases you use to make those sales. You can read the ATO’s overview of GST-free sales for the official position.

Quick Decision Checklist: Should I Charge GST?

Use the following questions to work out the likely treatment. Each scenario still needs to be checked against your own facts, but this gives you a fast first pass.

For goods:

• Is the customer located outside Australia? If no, you generally charge GST.
• Will the goods be physically exported from Australia within 60 days of the earlier of receiving any payment or issuing an invoice? If yes, the sale can be GST-free.
• Will the goods be used in Australia before they leave? If yes, the sale is not a GST-free export.

For services:

• Is the customer a non-resident who is not in Australia when the service is done? If no, you generally charge GST.
• Is the service work physically performed on goods in Australia, or directly connected with real property in Australia? If yes, you charge GST.
• Is the service actually provided to another entity in Australia, even though you invoice an overseas customer? If yes, GST-free status can be denied.

For rights and intellectual property:

• Is the right or licence supplied to a non-resident for use outside Australia? If yes, the supply may be GST-free.
• Is the non-resident carrying on business through a fixed place in Australia? If yes, GST-free treatment does not apply.

GST Treatment by Scenario: A Quick Reference Table

The table below maps common situations to the likely GST treatment, based on ATO guidance and the GST law. Always check the specific facts of your sale.

What Is a GST-Free Supply?

A GST-free supply is a sale where you do not include GST in the price, but you keep the right to claim back the GST you paid on related business purchases. Exports are listed among the things that are GST-free. This is a genuine advantage for exporters and service providers selling to non-residents.

It is worth distinguishing GST-free supplies from input-taxed supplies. With a GST-free supply you do not charge GST on the sale, and you can still claim credits for the GST included in your purchases that relate to that sale. With an input-taxed supply, you also do not charge GST, but you cannot claim GST credits on the related purchases. Financial supplies are a common example of input-taxed supplies. Getting this distinction right matters because it directly affects how much GST you can recover.

Exporting Goods to Overseas Customers

Goods exported from Australia are GST-free if they are exported within 60 days of one of the following, whichever occurs first: the supplier receives any payment for the goods, or the supplier issues an invoice for the goods. This timing rule is central to the export concession, and missing the window can change the treatment.

Where goods are paid for by instalments, the payment or invoice that starts the 60-day clock is the one for the final instalment. If you cannot export within the 60-day period, you can apply to the ATO to extend the export period. If goods are not exported within the required timeframe, GST-free status no longer applies and GST must be charged on the sale. The technical guidance on GST-free exports is set out in GSTR 2002/6.

For more detail on meeting the conditions, see our complete guide on how to qualify for GST-free exports from Australia.

Selling Goods to New Zealand Customers

New Zealand is treated as overseas for GST purposes, so the same export and services rules apply. The 60-day export timing and documentation requirements are identical to sales to any other overseas country.

Goods Delivered to a Freight Forwarder in Australia

If goods are delivered to a freight forwarder, customs agent, or consolidator in Australia, GST-free status may still be claimed, provided it is clearly documented that the goods are subsequently exported. The documentation needs to show the goods physically left Australia. The ATO requires documented proof of export, and verbal arrangements do not meet that standard.

Providing Services to Non-Resident Customers

Services performed for non-residents can be GST-free, but only when specific conditions are met. The rules sit in section 38-190 of the GST Act. Under Item 2, a supply of services (other than goods or real property) is GST-free if it is made to a non-resident who is not in Australia when the supply is done, and the supply is not work physically performed on goods in Australia and not directly connected with Australian real property.

Under Item 3, a supply is GST-free if the recipient is not in Australia and the effective use or enjoyment of the supply takes place outside Australia, subject to similar carve-outs for goods in Australia and Australian real property. In July 2025 the ATO replaced its long-standing ruling on services to non-residents with two new public rulings and revised regulations. You can read a practical summary of these changes in this overview of charging GST to overseas clients.

Do I Charge GST to a US or UK Company?

The same non-resident services rules apply regardless of the country your customer is in. What matters is whether the customer is a non-resident who is not in Australia when the service is done, and where the service is actually used or enjoyed. A client in the United States, the United Kingdom, Singapore, or anywhere else is treated the same way under the section 38-190 tests. For example, design or consultancy work delivered entirely online to an offshore client, with the output used overseas, can be GST-free.

When a Service Is Used in Australia It Stays Taxable

A service that is used or enjoyed in Australia is taxable even if the recipient is a non-resident who is not physically here. A clear example is tuition provided to overseas students who are studying in Australia. International students who have lived in Australia for six months or more are typically considered Australian residents for tax purposes, and the education is consumed here, so the supply is connected with Australia and GST applies. The location of consumption, not just the customer’s nationality, drives the result.

Invoicing an Overseas Parent but Delivering to Australian Staff

Under subsection 38-190(3), GST-free status can be denied where a supply is made to a non-resident but is actually provided to another entity in Australia. A common case is invoicing an overseas parent company while the service is delivered to its Australian staff or subsidiary. GSTR 2025/1 deals specifically with when a supply to a non-resident is actually provided to another entity in Australia and therefore loses its GST-free status under subsection 38-190(3). If the real recipient of the benefit is in Australia, you may need to charge GST.

Splitting a Service Used Partly in Australia

Where a supply is provided partly to people in Australia, GST-free treatment is denied for that portion, and GST must be charged on the Australian part using a reasonable, documented apportionment method. GSTR 2025/2 explains Item 3 (effective use or enjoyment outside Australia), including how to apportion mixed supplies. The key is to use a method you can justify and to keep evidence of how you arrived at the split.

Supplying Rights and Intellectual Property Used Overseas

If a business supplies rights, such as licences or intellectual property, to a non-resident and those rights are intended to be used outside Australia, the supply may be GST-free. The key element is the location where the right will be used, not where it is granted. So a licence granted from Australia but used by the customer offshore can still qualify.

This treatment does not apply where the non-resident is carrying on business through a fixed place in Australia. For more on applying these rules in practice, see our guide on GST on sales to overseas customers.

When GST-Free Rules Do Not Apply

Even if your customer is a non-resident, not all supplies qualify for GST-free treatment. The main carve-outs are:

• The customer is in Australia at the time the service is done.
• The service is directly connected with real property in Australia.
• The service is work physically performed on goods in Australia, including repairs and modifications.
• Valuations, architecture, project management or property advisory connected with land in Australia, which are treated as taxable.
• The non-resident is carrying on business through a fixed place in Australia.

These rules keep local consumption within the GST base, which protects the integrity of the domestic tax system.

Can You Still Claim GST Credits on GST-Free Export Sales?

Yes. Registered businesses making GST-free sales can still claim GST credits (input tax credits) for the GST included in the price of purchases used to make those sales. This is one of the real advantages of GST-free treatment compared with input-taxed supplies, where credits cannot be claimed.

To claim a GST credit, the purchase must be partially or exclusively for business use and not related to making input-taxed supplies. You need a valid tax invoice for purchases over $82.50, and that tax invoice must contain the supplier’s name, ABN, date of issue, a description of the goods or services supplied, and the GST amount. Incomplete or incorrect tax invoices are not accepted. For an explanation of how input tax credits work, see this guide to claiming back GST and input tax credits.

Do You Still Need to Register for GST?

You may still need to register for GST even if you only make GST-free sales to overseas customers. GST-free exports count towards the $75,000 GST registration threshold where the supplies are connected with Australia. So a business that makes only GST-free supplies can still be required to register once its connected turnover reaches that level.

You must register for GST when your GST turnover reaches $75,000 or more, and once you are required to register you must do so within 21 days. Non-profit organisations have a higher threshold of $150,000. Before registering you need an Australian business number (ABN), and you only need to register once even if you run more than one business. You can register through Online services for business, by phone on 13 28 66, or through a registered tax agent or BAS agent. The ATO sets out the full process for registering for GST.

Reporting GST-Free Sales on Your BAS

Once you are registered, GST-free supplies must still be reported in your Business Activity Statement (BAS), even though no GST is charged on them. Reporting these sales keeps your records transparent and supports any GST credits you claim on related purchases.

BAS reporting periods can be monthly, quarterly, or annually, depending on your circumstances. You can lodge online, through a registered agent, or through online accounting software.

Records the ATO Requires to Support a GST-Free Claim

The ATO expects documented proof to support GST-free treatment. The records you should keep include:

• Engagement letters or contracts showing the non-resident counterparty and that they were not in Australia at the relevant time.
• Contracts specifying that the services or rights will be used outside Australia.
• Export evidence for goods, such as a bill of lading, air waybill, export declaration, and customs clearance documents, including dates and recipient details.
• Agendas, attendance records, and evidence showing where a service was delivered and where the outputs are used.
• Correspondence such as emails and purchase orders showing the customer’s offshore status.

Australian exporters must retain all supporting documents demonstrating compliance with GST-free conditions for at least five years. Failure to keep the required records can lead to penalties or GST adjustments.

Invoice Wording for GST-Free Supplies

For a GST-free supply, your invoice should show no GST and include a note such as “GST-free export of services”. For a taxable supply, you must issue a tax invoice that includes the amount of GST, the GST rate, and a clear statement that the total includes GST where applicable. Clear invoice wording makes your treatment easy to follow and supports your position if the ATO ever reviews it.

Frequently Asked Questions

Do I charge GST on commission earned from an overseas business?

It depends on where the service connected with that commission is used and whether your customer is a non-resident not in Australia. If the underlying service is provided to a non-resident outside Australia and is not connected with Australian goods or real property, it can be GST-free. If the benefit is actually delivered to someone in Australia, it may be taxable. The facts matter, so check your specific arrangement.

Do I need to register for GST if I only make GST-free sales overseas?

Possibly. GST-free exports count towards the $75,000 turnover threshold where the supplies are connected with Australia. If your connected turnover reaches that level, registration is required even though your sales are GST-free.

How are digital products and online platform sales to overseas customers treated?

Digital products and online services follow the same principles as other services. The treatment turns on whether the customer is a non-resident who is not in Australia and where the product or service is effectively used or enjoyed. Because platform sales can involve many small transactions and different rules depending on the parties, it is worth confirming the treatment for your particular setup rather than assuming it is GST-free.

Get Help With GST on Overseas Sales

Selling to overseas and non-resident customers can be a real advantage for Australian businesses, and in many cases the sale can be GST-free. The benefit comes with responsibility. You need to apply the right test to each sale, meet the timing and connection conditions, keep solid documentation, and report your GST-free supplies correctly on your BAS.

The rules changed in 2025, and small details like where a service is used, or whether goods leave Australia within 60 days, can change the answer entirely. If you are unsure how to treat a specific sale, getting it confirmed before you issue the invoice is far cheaper than fixing it later. Book a meeting with Tax Window and we will help you apply the correct GST treatment to your overseas sales and keep you fully compliant.

About The Author: Artur Osadchiy

Artur is a Certified Practising Accountant with over 30 years’ experience working as a trusted advisor to 600+ clients across Australia. Based in Melbourne, he started Tax Window with his wife Marina in 2009 and leads the firm’s tax and accounting team. In his free time, Artur enjoys watching the AFL (go Kangas!) and spending time with family.