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What is GST and Which Countries Have It?

What is GST and Which Countries Have It?

If you’re a US e-commerce seller, GST may not even be on your radar. We don’t blame you. With so many countries in the world implementing their own tax schemes, consumption taxes can get real complicated, real fast.

So here’s what you need to know. GST stands for “goods and services tax” and is one of the consumption taxes used around the world, so that governments can collect revenue from the purchases of goods and services. Like VAT, GST is typically charged at every stage of production. And like US sales tax, it’s typically levied as a flat-rate percentage, based on the value of the transaction.

If you only ever sell to US customers, you may never need to dip your toes into the complicated waters of GST. But if you begin selling internationally, it can be helpful to know which countries have GST.

Which Countries Charge GST?

The following countries use GST:

  • Australia
  • Canada
  • India
  • Maldives
  • New Zealand
  • Papua New Guinea
  • Singapore

GST in Australia

Implemented in July 2000, Australia's GST replaced multiple indirect taxes with a single, broad-based consumption tax. Most goods and services are taxed at a standard rate of 10%, with exemptions and zero-rated supplies. Mandatory registration kicks in for businesses with annual taxable turnovers exceeding AUD 75,000, although smaller businesses can opt for voluntary registration.

GST in Canada

Canada’s GST came on the scene in January 1991, pioneering the dual GST system. Under this system, both federal and provincial governments collect taxes on most goods and services. The federal GST, set at 5%, applies nationwide, while provinces levy the Provincial Sales Tax (PST), varying between 6% to 7%. Certain items like basic groceries, prescription medications, and exports are zero-rated. Businesses with an annual turnover exceeding CAD 30,000 must register for GST.

GST in India

Implemented in July 2017, India's GST system aimed to streamline the country's indirect tax structure. Operating on a dual model, both central and state governments collect taxes. The Central GST (CGST) is levied by the central government on intra-state transactions, while the State GST (SGST) is collected by states. Standard rates range from 5% to 28%, with zero-rated or exempt categories. Reduced rates are applicable for composition scheme taxpayers.

GST in Maldives

Introduced in October 2011, Maldives' GST system applies a standard rate of 8% (formerly 6%) to most goods and services, with exceptions for specific supplies. You must register for taxes if your annual taxable supply exceeds MVR 1 million over a 12-month period.

GST in New Zealand

Implemented in October 1986, New Zealand's GST system is often hailed as a model, influencing many other countries. It applies to all goods and services sold within the country. Businesses must register for GST if their annual turnover exceeds NZD 60,000. The standard rate of 15% is applied to most transactions, including imports. While some goods or services have zero-rated or exempt status, the system keeps exemptions and reduced rates limited.

GST in Papua New Guinea

Papua New Guinea’s GST rate is 10% and applies to most goods and services. That said, exported goods and services are zero rated, and the supply of some goods and services are exempt, including medical, educational, and financial services. Any business or individual whose annual turnover exceeds K250,000 in a 12-month period must register for GST. Businesses with annual turnovers less than the threshold can register for GST on a voluntary basis.

GST in Singapore

Introduced in April 1994, Singapore's GST follows a value-added tax approach. The standard rate, 8% until January 2023 and 9% thereafter, applies to most goods and services, with exceptions for specific supplies. Businesses with annual taxable turnovers exceeding SGD 1 million must register for GST, though voluntary registration is possible below this threshold. Registered businesses file regular returns and remit collected taxes to authorities.

Your GST Obligations

Just to make things even more confusing, the list above changes regularly as new countries adopt or change their tax policies. Why deal with the hassle of keeping everything straight?

Quaderno handles all of this tax compliance for you, so that you can spend your time focusing on dominating the global market — on bettering your product, getting to know your customers, taking care of your employees, or whatever else matters more than stressing over tax details.

In fact, Quaderno can do all of the following:

  • Calculate the right amount of tax to charge each customer, right on your checkout page.
  • Automatically verify the GST numbers you receive from customers.
  • Collect and store the customer location evidence that you need to get from every sale.
  • Create and send invoices in multiple languages and currencies.
  • Send invoices automatically.
  • Help ensure you don’t overpay on your returns.
  • Notify you when you’re about to pass a threshold and need to register in a new country.
  • Notify you when any tax policies or rates change, so that you’re always in the loop.

And that’s only how Quaderno can help with GST. When it comes to EU VAT, US sales tax, and others around the world, or simply everyday invoicing and accounting — Quaderno jumps through all the hoops for you and presents your business data in a way that’s easy to understand. Sign up for a free trial and see how Quaderno can give you peace of mind.

Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.