Deferring and refunding GST on imported goods

Deferring and refunding GST on imported goods
Deferring and refunding GST on imported goods

Importing goods and services with extra-added GST costs but not sure how you can apply for refunds or deference? The ATO has outlined a series of steps for all Australian businesses to follow when deferring or refunding any GST payments from imported goods to help better manage your cashflow.

Instead of paying GST every time you purchase an imported good, the ATO is now introducing a deferred payment scheme, where you can defer GST payments until the first activity statement lodged after your goods are imported.

An online application for the deferred GST scheme must be submitted for eligible businesses. To be able to apply for the deferred GST scheme, businesses must meet the following requirements:

  • Have an ABN
  • Be registered for GST
  • Lodge your activity statements monthly and online
  • Make your activity statements electronically
  • Comply with customs regulations on imported goods and services

According to the ATO, you can also apply for GST refunds when you return a low-value imported digital good or service. If your purchase possesses a custom value of $1000 or less, there are almost always GST costs attached to the product. While the GST added cost for one product may not be much, these tax payments do add up and it is important to consider applying for a refund when you choose to return these imported items.

When returning an imported good, your overseas supplier should always refund the paid amounts including GST but on the off-chance that they don’t, the ATO is always open to helping out with refund requests for imported GST costs. The ATO encourages contacting them directly for any GST-related problems concerning your business.

With the recent outbreak of COVID-19 and its resulting negative economic impacts on small Australian businesses, it is also worth noting that the ATO has also introduced some tax relief options including GST refunds, whereby businesses can acquire their GST refunds faster by reporting GST monthly rather than the usual quarterly reports.

COVID-19 crisis: reviewing your super

COVID-19 crisis: reviewing your super
COVID-19 crisis: reviewing your super

While the coronavirus has been causing Australia’s economy to take a recessive turn due to reduced cash flow, there is still no reason to panic about your superannuation investments just yet.

However, if you are a middle-aged worker or a soon-to-be retiree, reviewing your superannuation investment strategy may prove helpful for other future unexpected economic problems. Here are some suggestions on how you can manage your super with a minimised risk strategy:

Build a cash buffer:
Cash will always be a conservative option when it comes to super allocation. For those approaching retirement, investing in cash is a low-return but also a low-risk strategy to protect your savings. Not only should middle-aged workers work towards investing their super funds in cash, but they should also build a physical cash buffer and save on the side without contributing the extra money into super funds. This way, in the off chance that something does go terribly wrong with your super funds, at least you have a cash buffer to help you out.

Financial planner/personal accountant:
If you can spare some extra money to do so, hiring a personal accountant or financial planner will always benefit you in the long run. Unlike super funds which invest your money into outlets deemed profitable by the company itself, a financial planner will help you invest your money into avenues that you personally prefer. While this may mean converting into a self-managed super fund, having sole control of your super funds is never a bad idea.

Pay attention to super fees:
The one thing that you as a super fund holder can choose is the fees you wish to pay a super fund for managing your super. Do your research before committing or switching to a super fund and focus on the fundamentals, such as fees. High fees will obviously negatively impact your retirement savings and while rates may increase at a seemingly minuscule rate, they will add up by the time you can take out your super. Always choose a super fund which is most aligned with your personal values and monetary goals and do adequate market research beforehand.

Increased cash flow support for businesses as COVID-19 continues

Increased cash flow support for businesses as COVID-19 continues
Increased cash flow support for businesses as COVID-19 continues

The Australian Government has increased support for businesses to manage cash flow challenges under the ongoing COVID-19 circumstances.

The Boosting Cash Flow for Employers measure announced on 12 March 2020 will be increased to provide up to $100,000 for eligible small and medium-sized businesses. To be eligible employers must have been established prior to 12 March 2020 and have an aggregated annual turnover of less than $50 million and employ workers.

The measure will provide employers with a payment equal to 100% of their salary and wages withheld. This is a rise from the original 50%, with maximum payments being increased from $25,000 to $50,000 and minimum payments being increased from $2,000 to $10,000.

Employers will receive payments from 28 April 2020 from the ATO as automatic credit in the activity statement system upon lodging eligible upcoming activity statements.

Eligible businesses will be provided with an additional payment during July – October 2020. The payment will be equal to the total amount received under the Boosting Cash Flow for Businesses scheme. For monthly and quarterly activity statement lodgers, these payments will be provided as automatic credit in the activity statement system for each lodgement up until October 2020.

The Government has also introduced the Coronavirus SME Guarantee Scheme to support the flow of credit for small and medium enterprises (SME) by providing a guarantee of 50% to participating SME lenders for new unsecured loans that will be used for working capital. To be eligible, SMEs will have a turnover of up to $50 million and the loans must comply with the following terms:

  • The loan is a maximum of $250,000 per borrower.
  • The loans will be up to three years, with an initial six month repayment holiday.
  • The loans will be in the form of unsecured finance.

The SME Guarantee Scheme will still require businesses to repay these loans and approval is subject to regular lending requirements. The Scheme will commence by early April 2020 and be available until 30 September 2020.

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