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Do You Export Goods or Services in Australia? Essential Bookkeeping Tips for Australian Businesses

If your business exports goods or services, it’s important to understand how to manage bookkeeping and tax compliance effectively. From GST exemptions to foreign currency transactions, here’s a comprehensive guide to bookkeeping for businesses involved in exporting from Australia.

What Are Exported Goods and Services?

Exported goods and services refer to products and services sold to overseas customers. In Australia, exports are generally GST-free, meaning you do not charge GST on sales to international customers. However, accurate record-keeping is essential to substantiate GST-free claims and comply with ATO requirements.

Key Bookkeeping Considerations for Exporting Businesses

Exporting goods and services can complicate bookkeeping processes, particularly when dealing with foreign currencies, international shipping, and tax exemptions. Here are the key considerations for effective bookkeeping:

• 1. Record All Export Sales: Maintain accurate records of all export transactions, including invoices, shipping documents, and payment receipts.
• 2. Track Foreign Exchange Rates: If you receive payments in foreign currencies, record the exchange rate at the time of the transaction for accurate reporting.
• 3. Apply GST Exemptions Correctly: Confirm that the goods or services qualify as GST-free exports and apply the correct GST codes in your accounting software.
• 4. Manage Shipping and Freight Costs: Record shipping and freight costs separately to track expenses and manage cash flow effectively.
• 5. Document Proof of Export: Retain proof of export, such as shipping documents and customs declarations, to substantiate GST-free claims.

GST Implications for Exported Goods and Services

Exports of goods and services from Australia are typically GST-free, but businesses must maintain documentation to substantiate the GST exemption. To qualify for GST-free treatment, the goods must be exported within 60 days of payment or invoice, whichever occurs first.

Common GST-free export items include:

• Physical goods exported to overseas customers
• Services performed for customers located outside Australia
• International freight and logistics services
• Software and digital products supplied to international clients

Handling Foreign Currency Transactions

If your business receives payments in foreign currencies, you must convert the amounts to Australian dollars (AUD) for reporting purposes. The ATO allows you to use the exchange rate on the day of the transaction or a specific rate determined by your accounting software provider.

Be sure to record:

• The foreign currency amount received
• The applicable exchange rate
• The AUD equivalent for financial reporting and GST calculations

Export Documentation and Record-Keeping

Maintaining accurate records is crucial for businesses involved in exporting goods and services. Ensure you keep the following documents for at least five years:

• Invoices and shipping documents for export sales
• Customs declarations and export permits
• Proof of payment, including bank statements and remittance advices
• Exchange rate records for foreign currency transactions

Tax Implications for Exporting Services

While most goods exported from Australia are GST-free, some services may be subject to GST. Ensure that you verify the GST treatment of exported services, particularly when dealing with digital products, intellectual property, or consulting services provided to overseas clients.

Need Help Managing Export Transactions?

Exporting goods and services adds a layer of complexity to bookkeeping and tax reporting. At Northern Beaches Bookkeeping Solutions, we assist businesses with accurate record-keeping, GST management, and financial reporting for export transactions. Contact us today to ensure your business remains compliant and financially organised.