Released On 25th Mar 2021
Importing goods into Australia - 5 important things you should know
If your business is thinking of importing goods into Australia, it’s important to do your homework about this vibrant and exciting market. With many years’ experience as an Importer of Record in Australia, uur guide covers some important facts to help you import goods to this country.
Australia has a population of around 25.5 million, and Australians benefit from a low cost of living, affordable quality housing, extensive healthcare benefits and one of the best educational and social systems in the world.
10 largest Australian import industries
Australia has no shortage of business opportunities as a key player in the Asian markets. Key business centres in Australia include Sydney (New South Wales), Melbourne (Victoria), Brisbane (Queensland) and Perth (Western Australia).
To support their main industries of Finance, Business Consulting, Metals and Mining, Energy and the Healthcare Industry, Australia boosts the 10 largest importing industries:
- Motor vehicle manufacturing
- Petroleum refining and petroleum fuel manufacturing
- Pharmaceutical product manufacturing
- Computer and electronic office equipment manufacturing
- Communication equipment manufacturing
- Oil and gas extraction
- Measurement and other scientific equipment manufacturing
- Mining and construction machinery manufacturing
- Audio visual electronic equipment manufacturing
- Power automation products and other electrical equipment manufacturing
Source: IBISWorld; Biggest Importing Industries in Australia in 2021
Let’s take a look at those five key considerations your business should know when importing goods into Australia:
1. Australia doesn’t require Import licenses
However, depending of the goods, permits may be required to clear the goods out of customs. This is regardless of the value of the shipment; restricted items will need to be labelled correctly with a full description. Often, the country of manufacture is to be included on the Commercial Invoices and Packing list. Occasionally, a datasheet or product information guide will need to be supplied.
A list of prohibited goods can be found on the Australian Border Force website.
2. Fair Market Value is important
We have previously written about the importance of Fair Market value, and Australian customs is no exception. Attempting to value a shipment at substantially lower than its transaction value will cause issues at customs, and won’t be welcome.
Ensuring the goods are labelled at the sale price by applying “the transaction method” is important, as this is how import duties and taxes are calculated. It will also aid the analysis of the Australian market by the Australian Bureau of Statistics.
Conditions must be met to use the transaction valuation method. The buyer and seller should not be related, with the sale purely based on business need. The transaction value can involve deductions or additions such as commissions or royalties, but mustn’t be excessive – it must be “fair”.
3. Country of Origin is important
Dictating the Country of Origin or the ‘Rule of Origin’ is important because it is applied to understand where goods originate, and to find out if that country has preferential benefits in Australia such as reduced rates of taxes and import duty under International trade rules.
Australia is a party to many Free Trade Agreements (FTAs). Australia has a signed FTA with New Zealand, USA, Singapore, Thailand.
The benefits of Australia’s FTA with Singapore (SAFTA) include, but are not limited to:
- Elimination of all tariffs from entry into force
- Restrictions on the number of wholesale banking licences to be eased over time
- More certain, and enhanced operating environment for financial services suppliers
- Conditions eased on establishment of joint ventures involving Australian law firms
- The number of Australian law degrees recognised in Singapore doubled from four to eight.
- Removal/easing of residency requirements for Australian professionals
- Short-term entry for Australian business people extended from one month to three months.
- Agreement to facilitate paperless trading in order to reduce business transaction costs.
4. The Australian Business Number (ABN)
Many people ask us what the Australian EORI number is, but when importing into Australian businesses, the importer of record will need to be a registered business entity and have an Australian Business Number (ABN). It’s very similar to the European EORI number and is key for Goods and Services Tax (GST) purposes.
5. Australian Import Duties, Taxes and Import Declarations
All goods imported into Australia are liable for duties and taxes. There are very few exceptions unless the goods have a value of or equal to AUD $1,000 or less.
Information technology equipment is generally duty-free but it has a GST rate of around 10%, and rates for Luxury Car Tax and Wine Equalisation don’t apply.
The declaration types for imported goods are:
Import declaration (N10) - An import declaration is required when a consignment of imported goods has a combined value of over AUD $1,000, and is being cleared into home consumption.
All applicable duties, taxes and charges must be paid before the goods can be released.
An Import Declaration is a statement made by the importer (owner of the goods), or their agent (licensed customs broker / Importer of Record):
- about the goods being imported
- details about the importer
- how the goods are being transported
- the tariff classification and customs value.
Import declarations may be:
- Submitted in the Integrated Cargo System (ICS)
- Lodged by presenting a completed, signed Import declaration document at an ABF counter.
Self-assessed clearance (SAC) declaration - If your imported goods arrive by air or sea cargo and have a value equal to or less than AUD $1,000, you must lodge a SAC declaration.
Warehouse declarations (N20) – If your goods will be imported into a licenced warehouse prior to clearing, and have a value of more than AUD $1000.
If you are importing goods for business, generally you only need the N10 import declaration.