GST on services to overseas clients: when your export is GST-free, and the evidence to keep
Plenty of Australian sole traders now earn most of their income from clients overseas: a developer contracting to a US startup, a copywriter with a British agency, a designer paid through a foreign platform. The GST law was written with this in mind. A supply of services to a recipient outside Australia is usually GST-free, which means no GST on the invoice and nothing at 1A on the BAS. But the rule has exceptions that catch people who assume "overseas client" is the whole test. This guide covers when an export of services is GST-free, when it is not, and what to keep so you can show the ATO which one applied.
Updated 28 September 2026. General information only, not tax advice.
The general rule
A supply of anything other than goods or real property is GST-free when it is made to a recipient who is not in Australia when the thing supplied is done, and its effective use or enjoyment takes place outside Australia. In plain terms: an overseas client, outside Australia while you do the work, using the result overseas.
GST-free is not the same as outside the GST system. The sale is taxed at zero, so it counts in your GST turnover, it goes on your BAS, and you keep the right to claim credits on the laptop, software and home office costs that produced it.
The traps that make it taxable after all
- Work on goods or property in Australia. Repairing equipment located here, or services connected with Australian real estate such as managing a unit in Sydney, are taxable even when the owner lives in London.
- The client is in Australia when the work is done. A tourist who books your photography session while visiting is in Australia, so the supply is taxable. A foreign company with an Australian branch that the work is for is treated the same way.
- An overseas payer, an Australian recipient. If a US head office contracts you to train staff in its Melbourne office, or a foreign parent pays you to build a website for its Australian subsidiary, the service is provided to an entity in Australia and is taxable.
- The client is really Australian. An Australian company with staff temporarily overseas is still an Australian recipient. Get the client’s legal entity and address, not just the location of the person emailing you.
What goes on your BAS
On the simpler BAS most small businesses use, the export goes into G1, total sales, at its Australian dollar value, and adds nothing to 1A. If your statement shows the full set of labels, GST-free exports go at G2 as well; check the ATO’s label instructions. Credits on your business purchases go at 1B as normal, so a quarter with only export income usually produces a refund, and regular refunds from a business with nothing at 1A are exactly the pattern the ATO checks. See BAS labels explained.
Invoicing an overseas client
The invoice does not need to be a tax invoice, because there is no GST on it, but it should still carry your ABN, the date, a description, the client’s legal name and overseas address, and the words "GST-free export" so nobody adds 10% later. You can bill in the client’s currency; if you do, convert to Australian dollars at the rate for the day the money is received (the ATO publishes daily and monthly rates) and use the same approach all year. See how to invoice as a sole trader.
A United States client may ask for a W-8BEN before paying. It tells them you are a foreign person so they do not withhold US tax; sole traders use the individual version, not the W-8BEN-E for entities.
The evidence to keep
The ATO does not take "overseas client" on trust. For each export client keep the contract or engagement email naming the client’s legal entity and overseas address; anything showing where the client was while the work was done and where they use it, such as a company registration extract or correspondence from an overseas office; your invoices marked GST-free, and the bank or platform records showing the payment came from abroad. Five years, like everything else; see record keeping requirements.
The $75,000 threshold still applies
GST turnover counts GST-free sales. An Australian designer with A$80,000 of income entirely from overseas clients must register, lodge a BAS each quarter and report every sale, even though no quarter will ever show GST on sales. For an exporter, registration is mostly upside: every quarter returns the GST on your Australian expenses. See do I need to register for GST.
How FlowFi helps
FlowFi categorises every deposit from your bank statement and keeps the payer on each line, so overseas clients sit apart from Australian ones when you review the quarter, GST-free sales go into G1 without touching 1A, and the credits on your Australian expenses build 1B. Whether a particular contract is caught by one of the exceptions is a judgement about the contract, and one for your accountant.
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Frequently asked questions
My client is overseas but pays me through an Australian agency. Still GST-free?
Look at who your supply is made to. If your contract is with the agency and it on-sells your work, your sale is to an Australian business and carries GST. If the agency only collects payment and your contract is with the overseas client, the export rules can apply. The contract decides, not the bank deposit.
Do I charge GST to a New Zealander who buys my online course?
A course taken by someone outside Australia, and used there, is generally GST-free. If the same person buys it while on holiday in Queensland, it is taxable.
I paid 1A on a year of exports by mistake. Can I get it back?
Usually. Overpaid GST on sales is a credit error you can correct on a later BAS within four years, provided you did not pass the GST on to the client in the price. If you charged the client 10%, you generally have to refund them first. See [fixing a mistake on a lodged BAS](/guides/fixing-a-mistake-on-a-lodged-bas).
General information only, not tax advice. Check your own situation with a registered tax agent or the ATO.
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