For those who don’t already know, goods purchased from overseas less than $1,000 is not taxed or subject to GST….. which means goods over $1,000 are taxed and subject to GST. And for those who haven’t been reading/watching the news in recent times, Australian retailers are crying poor and lobbying the government to lower the threshold to ‘make Australian retailers more competitive’. What a load of BS!!!! Don’t get me started on this topic as I’m passionately enraged at those Australia retailers who have been ripping us off and subjecting us to appalling customer service for so long!
So, you’re probably thinking that I’m going to give you some great tip to help avoid customs?? Unfortunately, I can’t work that kind of magic but I can at least educate you all so you’re not hit with nasty surprises and you can make more informed purchases.
Below is a very quick crash course on customs duty – hopefully this is all you’ll need to know:
- Duties and taxes apply to one item over $1,000 or multiple items over $1,000 that purchased about the same time – so don’t think you’re safe if you buy 2 lots of $600 items.
- Customs duty is payable based on the classification of the item that is being purchased. For bags or apparel, it is usually 5% of the value, can be as high as 10% depending on the fabric of the apparel.
- GST is also payable which is 10% of the ‘Value of the Taxable Importation’ – basically this means 10% of the item you’re purchasing + the customs duty + shipping charges you have paid. I agree it’s ridiculous that you’re paying another 10% on the customs duty…. go figure!
- Customs will notify you that your goods have been held by them and won’t be released until the duties and taxes have been paid.
And here are a few of my tips to help when making purchases….
1. Pre-pay duties and taxes
A lot of international sites includes all duties and taxes in their price which essentially means you have already paid for the customs duty. Now this is only true where you select Australia in the country options on the website. You will notice that if you select say the UK or the US, the prices will become different and that’s because these prices won’t include the customs duty. The benefit of this is that the paperwork will all be done by the retailer prior to shipping and won’t be held up by customs here as everything will be paid for.
2. Mark the item as a gift no longer works!
A long time ago (well, about 4 years ago), there was a concession that if the items were marked as gift, then no customs duty was payable. Sounds great huh? The flip side was that the threshold was a lot lower. Nowadays, marking it as a gift has no bearing on customs duty payable as you are still required to put total value of goods on the shipping documents. The only benefit of marking the item as a gift during the checkout process is you might get it gift wrapped for free!
3. Wait until the item goes on sale!
Sorry not a very good tip but it worked for me with the Miu Miu bag I was eyeing on Net-a-Porter. Originally priced at $1,500, waited till it went on sale at half price and snapped it up straight away and well under $1,000!
For more information, go the the Australian Customs website here.