BAS, GST, and Cash Flow Management

GST registration is mandatory when your annual GST turnover exceeds $75,000. As a registered entity, you charge 10% GST on taxable supplies, claim Input Tax Credits (ITCs) on business-related purchases, and remit the net amount to the ATO via your Business Activity Statement (BAS). For App Store sales in Australia, the GST situation has a nuance: Apple acts as the merchant of record for Australian customers, which means Apple collects and remits the GST on your behalf for App Store sales. You don't charge GST separately on these sales. For direct sales (web subscriptions, direct billing to enterprise clients), you must charge and remit GST normally. For software sold to overseas customers (B2C digital services), GST generally doesn't apply as the supply is consumed offshore. For B2B sales to overseas businesses, also generally GST-free. This is relevant for any international sales of your apps or services — you're not over-remitting GST on these.

BAS is typically lodged quarterly (PAYG Instalments and GST). The quarterly cycle — September, December, March, June — is a cash flow challenge for business owners who don't plan for it. A $30,000 GST liability is not surprising if you track it monthly, but catastrophic if you've spent the money. The simple rule: every week, set aside 10% of all GST-exclusive business income received into a separate 'tax' account. This covers your net GST liability continuously. Never touch this account for operating expenses. By the time BAS is due, the money is sitting there. For PAYG instalments (prepayments of your income tax liability), the ATO calculates an instalment amount based on your prior year's income. If your current year income will be significantly different (higher or lower), you can vary your instalments to match. Varying downward preserves cash flow; varying upward avoids a large end-of-year bill. Use the ATO's gdp-adjusted instalment as a starting point, then adjust based on your year-to-date performance.