treeoflife2009 wrote:Hey guys I don't know if you can help me with my question :D If your drop shipping product cost is 1k & in Australia you don't get taxed, & anything above that you get taxed %10 & no gst because your drop shipper. My question is if your running a drop shipping business & the tax office knows about it & its legal wouldn't you get pulled up on it because your some how avoiding paying tax purposes &your using there system against them :P. My second question is it better to keep your product cost below the 1k mark or above ? In the the time aren't you limiting your self when it comes to profit?? I hope my question helps others
In regards to Australian GST charges.
Not 100% sure I completely understand your question, but let me try to answer for you and see if that makes sense. For your first question, it is completely incumbent on you as a registered business operator to ensure all your books are in order and everything declared to the Tax Dept or your accountant at tax time.
There will always be a GST component that you will definitely need to pay, the job of a good accountant is to limit that liability as much as possible with off-sets. I would strongly suggest you meet with an accountant so they can explain your responsibilities and how it all works so you are fully informed.
In regards to your second question. No, I don't think it's wise to keep under the 1K margin if your market has products priced above that mark. That will only limit your market, not a great idea.