Shopify Sellers – Sleek FAQs
Business Registration FAQs
Q: What business structure should I choose for selling on Shopify in Australia?
The choice depends on factors like liability, taxes, and compliance obligations. Options include sole trader, partnership, company, and trust. Each has different implications for liability and tax obligations.
Q: Do I need to protect my intellectual property before selling on Shopify Australia?
Yes, registering trademarks and designs with IP Australia is crucial for protecting your brand and products from infringement.
Q: Is the Australian Consumer Law (ACL) applicable to Shopify sellers?
Absolutely, the ACL protects consumers and applies to all businesses in Australia, including those selling on Shopify. Sellers must understand their obligations under the ACL to ensure compliance.
Q: Should I have a Supply Agreement with my suppliers?
While not legally required, having a Supply Agreement is highly recommended to clearly define the terms of supply, pricing, and dispute resolution.
Q: Do I need an ABN (Australian Business Number) to sell on Shopify in Australia?
Yes, an ABN is required for selling on Shopify Australia. It’s used to identify your business for tax purposes and is necessary for both local and international sellers. If you’re selling on Shopify Australia, you need to have an ABN and register for GST if your turnover is $75,000 or more per year.
Q: How can I ensure compliance with Shopify’s policies and the ACCC regulations?
Familiarise yourself with the seller guidelines and the regulations set by the Australian Competition and Consumer Commission (ACCC) to avoid violations and penalties.
Q: Can I sell on Shopify Australia if I’m based outside Australia?
International sellers can sell on Shopify Australia, but they must comply with Australian laws, have an ABN, and meet the seller requirements.
Tax, Accounting and Bookkeeping FAQs
Q: How do I manage GST for my Shopify sales in Australia?
If your business is registered for GST, you need to include GST in the price of items sold and claim credits for the GST included in the price of purchases for the business. Shopify sellers must account for GST on their sales and can claim GST credits on their purchases if they are registered for GST.
Q: What steps should I take to register for GST if my Shopify store exceeds the $75,000 turnover threshold?
If your store’s annual turnover exceeds the $75,000 threshold, registering for GST becomes mandatory. You can register for GST via the Australian Taxation Office (ATO) website using the online services for businesses. This process can be completed by logging into your myGov account linked to your business.
Alternatively, you may choose to register through a tax professional (such as Sleek) who can handle the registration process on your behalf. Upon registering, you will receive a unique GST registration number, which should be included on all invoices you issue. It’s important to monitor your turnover closely, as you are required to register within 21 days of reaching the threshold.
Q: How should I handle bookkeeping and accounting as an Shopify seller in Australia?
Maintain accurate records of all financial transactions, including sales, purchases, fees, and expenses. Utilise accounting software tailored to Australian tax laws to simplify GST reporting and compliance. Consider outsourcing your accounting and bookkeeping to a specialist service provider.
You should consider utilising accounting software like Xero or QuickBooks tailored to Australian tax laws, and consider outsourcing accounting to a professional familiar with eCommerce. As specialist service provider like Sleek can streamline and automate this process on your behalf.
Q: How do I report my Shopify earnings for tax purposes in Australia?
Your Shopify earnings are reported as business income. You’ll need to declare this income on your annual tax return, and if you’re registered for GST, include it in your Business Activity Statement (BAS).
Q: What are the rules for deducting business expenses for Shopify sellers in Australia?
You can deduct legitimate business expenses from your income to lower your taxable income. This includes Shopify fees, shipping costs, purchase of goods for resale, and direct expenses related to the sale of goods on Shopify.
Q: How do I comply with Australian inventory accounting rules?
The Australian Taxation Office (ATO) mandates that businesses meticulously record all inventory transactions, including purchases, sales, write-offs, and current stock levels. The value of your ending inventory significantly influences your business’s reported income, thus affecting your tax obligations. It’s crucial to maintain accurate and comprehensive records to ensure compliance with ATO regulations, facilitating transparent financial reporting and aiding in effective business management.
Q: How do I handle returns and refunds under Australian tax law?
For GST purposes, if you issue a refund to a customer, you can generally claim a credit for the GST included in the refund amount in your BAS. Ensure accurate tracking of returns and adjustments in your financial records.
Q: What are the requirements for digital record-keeping for Shopify sellers in Australia?
The ATO requires businesses to keep records for five years. Digital record-keeping systems should be secure, reliable, and capable of producing accurate financial reports that comply with Australian taxation laws.
Q: How does the Australian tax year affect Shopify sellers?
The Australian tax year runs from July 1 to June 30. Shopify sellers must ensure that their financial reporting aligns with this period, submitting income tax returns and BAS statements as required.
Q: Are there any specific tax deductions or credits Shopify sellers in Australia should be aware of?
Shopify sellers can take advantage of various tax deductions and credits, including small business concessions, instant asset write-off for eligible purchases, and deductions for home office expenses if applicable.
