Q: How to ascertain whether GST has been charged for an ARN overseas supplier?
- Some overseas supplier invoices do not show any GST tax.
- ARN registered overseas suppliers cannot issue a tax invoice but may issue a receipt or standard invoice that may or may not show the GST charged.
A: If the business has supplied their ABN and proof of GST registration, then assume this is a business to business transaction.
If no ABN or proof of GST registration has been provided, then GST may have been charged, but the business cannot claim the GST (as there is no tax invoice) regardless if the transaction is under $82.50.
The $82.50 rule only applies to domestic purchases where a tax invoice is not required. It does not override the ARN restriction.
GST credits are never claimable on ARN invoices.
Q: How to know if the ARN of the overseas supplier is valid? Does the ABN Lookup include ARNs to verify the overseas supplier?
A: The only option is to ring the ATO to check the validity of the ARN provided.
Q: The business owner uses an overseas personal subscription for business use and seeks to claim the GST credit on the portion of business use.
A: If GST has not been charged, the reverse charge applies. You can only claim a GST credit proportionally to business use.
If GST has been charged on an ARN invoice, NO GST credit is claimable, regardless of business use.
Q: Australian businesses record keeping for overseas supplier’s transactions, if no invoice is supplied, is the credit card or PayPal facility enough for the ATO?
A: Yes, providing that the ARN has been provided in these statements.
Let’s break it down further:
| Supplier Type | GST Charged | Claimable Credits? | Notes |
| Overseas supplier with ARN | Yes | ✖ | ARN invoices are consumer only, not valid for GST credits |
| Overseas supplier without ARN | No (apply reverse charge GST) | ✔ Yes, on business use portion | Must self-assess GST on the BAS |
Checklist for Overseas Digital Products and Services
| Overseas Purchase Issue | Action | GST |
| Invoice is supplied showing ARN. GST charged. Australian Purchaser – ABN & GST registration provided. | Purchaser is unable to seek a refund of GST from Supplier as the overseas supplier is under the simplified ARN registration. No GST is claimable | No entitlement to claim GST regardless of the amount (even if the purchase is under $82.50). Supplier has not reimbursed the GST charged. (If subsequently reimbursed, a GST adjustment is required). |
| Receipt of payment is supplied; no ABN or ARN shown. No GST shown. | Seek an invoice from Supplier referencing their ABN or ARN if the transaction is >$82.50. | GST cannot be claimed if no valid tax invoice is supplied. |
| Tax invoice showing ABN is supplied. Australian Purchaser – ABN & GST registration provided. GST is charged. | Seek refund from Supplier by providing ABN and GST registered status. Claim GST on the BAS. | Entitlement to claim GST if business would otherwise be entitled to claim GST, and Supplier has not reimbursed the GST charged. If subsequently reimbursed, a GST adjustment is required. |
Example:
If you buy $1000.00 worth of good from an overseas supplier with an ARN, and they charge you $100.00 GST, and you pay $1,100.00 in total. On your BAS you cannot claim the $100 GST as an input tax credit.
If you believe GST was incorrectly charged (because you supplied your business ABN) and the goods are for business use, you need to seek a refund of the GST from the supplier.
