GST-free sales and invoicing clients outside Australia

GST in Australia is a flat 10%, with no state sales taxes on top. But not every sale carries it. Some sales are GST-free, some are input taxed, and much of the work Australian freelancers do for clients overseas falls into the GST-free group.

This guide explains the two kinds of sale without GST, the rules for exported goods and for services to non-residents, invoicing in a foreign currency, and where these sales go on your BAS. The free invoice generator lets you set GST per line, or mark a whole invoice as an export.

GST-free or input taxed

The ATO's list of GST-free sales also includes some health, medical and care services, some education courses, some childcare, international transport and mail, water and sewerage, and the sale of a business as a going concern. Each has detailed conditions, so check the ATO's page for anything you're unsure about.

Most small businesses never make input-taxed sales. If you're a GST-registered business, the difference matters on your BAS and for the credits you claim, not much on the invoice: both show no GST.

Exported goods

Goods you export are GST-free under section 38-185 of the GST Act if they leave Australia within 60 days of the earlier of:

• the day you receive any payment for them; or
• the day you issue the invoice.

If they don't leave within 60 days, the export rule doesn't make the sale GST-free.

Services to clients outside Australia

Services, digital products and other things that aren't goods or land are usually GST-free when you supply them to a non-resident who is outside Australia, under section 38-190. The ATO's ruling GSTR 2019/1 explains the detail. Two caveats come up most often:

• the supply must not be connected with land in Australia, such as design work for an Australian property;
• it must not be provided to someone in Australia, such as training delivered to the client's staff here.

A US company that hires an Australian designer to work on its website is the typical GST-free case. An overseas company whose Australian branch receives the work may not be. If you're unsure, check the ruling or ask a registered tax agent.

What the invoice shows

The law doesn't prescribe special wording for a GST-free sale. On a tax invoice, each line still needs to show the extent it's taxable, so a GST-free line should say so. A short note under the totals explains why there's no GST. Invoice Native adds:

GST-free supply to a non-resident (GST Act s38-190)

or "GST-free export of goods (GST Act s38-185)" when you choose that supply type, and marks every line "GST-free".

Worked example: a US client

A GST-registered developer in Melbourne bills a company in Austin, Texas, in US dollars:

GST-free supply to a non-resident (GST Act s38-190).

Because no GST is charged, the invoice doesn't need an exchange rate. When an invoice in a foreign currency does charge GST, Invoice Native shows the exchange rate and the GST in Australian dollars, such as "Exchange rate: 1 USD = 1.5120 AUD · Net A$1,512.00 · GST A$151.20".

For payment from abroad, add your bank's SWIFT/BIC to your bank details, or a payment link.

Mixed invoices

An invoice can mix taxable and GST-free lines. It then needs to show which lines are taxable, the GST payable and the total. Invoice Native's GST column does this line by line; see what a tax invoice must include.

How GST-free sales go on the BAS

Most small businesses use Simpler BAS, which is the default under $10 million GST turnover and needs only G1, 1A and 1B. Full reporting adds G2 and G3. Signed-in businesses get a BAS GST summary in Invoice Native that adds up G1, G2, G3 and 1A from the invoices they issued, with G4 for the worksheet.

Checklist

• ✅ Each line marked taxable, GST-free or input taxed
• ✅ Exported goods out of Australia within 60 days
• ✅ Non-resident clients outside Australia, with no link to Australian land
• ✅ A short note explaining why there's no GST
• ✅ Foreign currency if your client prefers it
• ✅ GST-free sales included in G1 on your BAS

Rules can change, so check the ATO's guidance or ask a registered tax agent about your situation. Invoice Native does not provide tax advice.