How the Goods and Services Tax (GST) affects business income 043-03100080

The Australian Business Number (ABN) is the identifier for all business dealings with the Australian Taxation Office (ATO) and for future dealings with other government departments. All businesses with an annual turnover of $75,000 or more must register for the GST and will need an ABN to do this. Businesses with a lower annual turnover may choose not to register for the GST.

Business Activity Statements (BAS) are not to be used to assess income for Centrelink payments; income tax returns are still to be provided.

GST refunds from the ATO are not to be treated as income as they are reimbursements of money that has been paid to the ATO by the business and is already being assessed as part of the business income. Where GST costs cannot be claimed back as input tax credits they will be allowed as a business deduction.

Any GST that is paid to the ATO is not a business deduction, but any amount that is forwarded to the ATO is not included in the customer's gross income assessment. Allowable business deductions should not include any amounts for which the customer receives an input tax credit or refund from the ATO.

When a customer is not registered in the GST system, they do not pay any GST to the ATO and do not receive any tax credits. If a customer is self-employed in a business that is not GST registered, the assessment of income rules have not changed.