Digital products are the fastest-growing part of Australian ecommerce. Online courses, ebooks, printables, templates, SaaS subscriptions, music, software downloads thousands of Australian sellers now generate income from products that never physically ship.

The accounting side hasn’t kept up. GST rules for digital products are different from physical goods in several important ways, and the specific treatment depends on who you’re selling to, where they are, and whether you’re selling through a platform like Etsy or Amazon KDP or directly through your own website.

This guide explains Australian GST on digital products for ecommerce sellers the core rules, the platform-specific treatment, the common mistakes, and what you actually need to do to stay compliant.

What counts as a digital product for GST purposes

Under Australian tax law, a digital product is anything delivered electronically rather than physically. The ATO defines this broadly, and it covers:

• Downloaded files (ebooks, PDFs, printables, music, software, design templates)
• Streaming services (video, music, podcasts)
• Online courses and memberships
• SaaS and app subscriptions
• Digital services delivered online (hosting, cloud storage, email marketing tools)
• Mobile apps sold through app stores
• Digital subscriptions (news, software, memberships)
• In-game purchases and digital content for games
  
  

If the customer never receives a physical item, you’re almost certainly dealing with a digital product.

The core GST question: who is selling to whom?

Three scenarios cover almost every digital product sale, and the GST treatment is different for each.

Scenario 1: Australian seller to Australian consumer

This is the simplest case. If you’re an Australian seller (registered for GST) selling digital products to Australian consumers, you charge 10% GST on the sale and remit it to the ATO through your BAS.

Standard GST rules apply. The $75,000 annual turnover threshold determines whether registration is required.

Scenario 2: Australian seller to overseas consumer

Sales of digital products from Australia to overseas consumers are generally GST-free exports under the ATO’s rules on exports of goods and services.

You don’t charge GST, but you still need to report the sale on your BAS as a GST-free supply. Many Australian ecommerce sellers miss this and incorrectly leave overseas digital sales off their BAS entirely.

The key documentation requirement is being able to prove the customer is located overseas more on that below.

Scenario 3: Overseas seller to Australian consumer

Since 1 July 2017, overseas sellers of digital products and services to Australian consumers have been required to register for Australian GST once their Australian-consumer turnover exceeds $75,000 AUD. This is commonly known as the “Netflix tax” because Netflix was one of the earliest big-name businesses affected.

Overseas sellers typically use the ATO’s Simplified GST registration pathway. No ABN required, no Australian bank account required, and GST is reported quarterly through an online portal.

This matters even if you’re an Australian seller, because it affects how you treat GST on digital tools you buy from overseas providers (Adobe, Canva, Mailchimp, Shopify’s own fees, etc). The GST on those overseas purchases is claimable as an input tax credit if you’re registered for GST yourself.

Platform selling: when the platform handles GST for you

Many digital product sellers use platforms that act as electronic distribution platforms (EDPs) under Australian tax law. When a platform qualifies as an EDP, the ATO treats the platform not the individual seller as the supplier for GST purposes.

In practice, this means the platform collects and remits GST on sales to Australian consumers on your behalf. You don’t charge GST separately on those sales.

Common platforms that generally operate as EDPs for Australian consumer sales:

• Etsy — collects GST on digital downloads sold to Australian consumers
• Amazon KDP — collects GST on ebook sales to Australian consumers
• Apple App Store — collects GST on app sales and in-app purchases
• Google Play Store — collects GST on app sales and in-app purchases
• Udemy — collects GST on course sales to Australian consumers
• Steam — collects GST on game sales and digital content
  
  

If you sell digital products exclusively through these platforms to Australian consumers, you generally don’t need to register for GST specifically for those sales. However, the EDP rules only apply to sales through those platforms if you also sell directly through your own website, those direct sales count separately toward the $75,000 threshold.

Direct selling: when you’re responsible for GST

Platforms that typically don’t act as EDPs (meaning you handle GST yourself):

• Shopify (your own store, not Shopify’s marketplace)
• WooCommerce or any self-hosted ecommerce platform
• Teachable, Thinkific, Kajabi, Podia — course platforms where you’re the seller of record
• Gumroad — depends on jurisdiction, but typically the seller handles GST for Australian customers
• ConvertKit Commerce, Stripe Checkout, direct PayPal invoicing
  
  

If you sell digital products through any of these to Australian consumers and your gross turnover from all sources exceeds $75,000, you need to register for GST and charge 10% on Australian consumer sales.

The tricky part is identifying which customers are Australian consumers vs overseas vs Australian businesses with an ABN. Each one gets different GST treatment.

The customer location problem

One of the biggest challenges with digital products is proving where the customer is located. For physical goods, the shipping address answers it. For digital products, there’s no shipping address.

The ATO allows you to rely on two pieces of non-contradictory evidence to establish customer location. Acceptable evidence includes:

• Billing address provided by the customer
• IP address of the device used to make the purchase
• Bank or card details indicating country of residence
• Mobile phone country code
• Information from a payment service provider
  
  

For sellers using Shopify, Stripe, or similar platforms, this data is usually captured automatically at checkout. The practical requirement is making sure your accounting system or ecommerce platform records enough evidence to defend the GST treatment if the ATO ever asks.

B2B digital sales — the ABN rule

If an Australian business buys your digital product and provides their ABN (and the purchase is for business purposes), the sale is generally treated as a B2B supply, and different rules may apply particularly around whether GST needs to be charged.

For overseas sellers to Australian businesses, the Australian business typically self-assesses GST (reverse charge) rather than the overseas seller charging it.

For Australian seller to Australian business, standard GST rules apply charge 10% GST if you’re registered, same as any other B2B sale.

The ABN prompt at checkout matters. Platforms that don’t capture it may be treating every sale as B2C by default, which affects your GST reporting accuracy.

Common GST mistakes with digital products

Treating all overseas sales as “outside Australian GST” and leaving them off the BAS entirely. Overseas sales are GST-free, but they still need to be reported on your BAS as GST-free supplies.

Charging GST on sales to overseas customers when they should be treated as GST-free exports. Overpaid GST reduces margin unnecessarily.

Assuming your platform handles GST when it doesn’t. Teachable, Thinkific, and Shopify do not act as EDPs for Australian GST — the seller is responsible. Many course creators and digital product sellers get this wrong.

Missing GST input tax credits on overseas software subscriptions. If you’re registered for GST and the overseas provider is registered under simplified GST (most major providers are), the GST on your subscription is a claimable input tax credit.

Not capturing enough customer location evidence to defend overseas GST-free export treatment if the ATO queries it.

Mixing digital and physical product GST treatment. If you sell both — say, physical books and ebook downloads of the same titles — the GST treatment of each may differ depending on the customer location.

Ignoring the $75,000 threshold because digital products feel “small.” Growth in digital sales (especially SaaS or subscription-based) can cross the threshold quickly without you noticing.

Record keeping for digital product sellers

The ATO requires five years of transaction records for GST purposes. For digital product sellers, this specifically means:

• Transaction records showing customer location evidence (billing address, IP, payment data)
• Platform settlement reports (if selling through Etsy, Amazon KDP, etc.)
• Invoices or receipts for each sale showing GST treatment applied
• Records of GST paid on overseas digital tool subscriptions you’ve claimed credits on
  
  

Most ecommerce platforms retain this data for a period but not necessarily for the full five years required. Download and store transaction reports regularly to make sure you have what you’d need in an ATO review.

When to get specialist help

Digital product GST becomes complex quickly, especially when:

• You sell across multiple platforms (your own site + Etsy + a course platform)
• You have significant overseas sales
• You’ve just crossed the $75,000 threshold and need to register
• You’re adding digital products alongside existing physical sales
• You’ve received an ATO query about GST on digital or overseas sales
• You’re uncertain whether a specific platform you’re using is an EDP
  
  

Our team at Outback Accounting provides GST compliance for ecommerce — including digital product sellers, platform-specific GST setup, multi-currency reporting, and ongoing BAS lodgement across Shopify, Etsy, Amazon, WooCommerce, and the major course and SaaS platforms.

Frequently asked questions

Do I have to charge GST on digital products in Australia? If you’re a GST-registered Australian seller selling digital products to Australian consumers, yes — standard 10% GST applies. If you’re below the $75,000 annual turnover threshold, GST registration is optional. Sales to overseas consumers are generally GST-free exports but still need to be reported on your BAS.

What is the Netflix tax? The “Netflix tax” is the informal name for the GST on imported digital services introduced from 1 July 2017. It requires overseas sellers of digital products and services to Australian consumers to register for and collect Australian GST once their annual Australian sales exceed $75,000 AUD. It applies to streaming, software, courses, ebooks, apps, SaaS, and most other digital products.

Does Etsy collect GST on digital downloads for Australian sellers? Yes. Etsy operates as an electronic distribution platform for Australian GST purposes and collects and remits GST on digital downloads sold to Australian consumers. If you only sell digital products through Etsy to Australian consumers, you generally don’t need to register for GST on those sales — but Etsy still charges GST on its own fees to you, which is claimable as an input tax credit if you’re GST-registered.

Does Shopify collect GST on digital products? Not automatically. If you sell digital products through your own Shopify store, you are the seller of record for GST purposes — not Shopify. You need to configure your Shopify tax settings to charge GST at 10% on sales to Australian consumers (if you’re GST-registered) and treat overseas sales as GST-free.

How do I prove a customer is overseas for GST-free export purposes? The ATO accepts two pieces of non-contradictory evidence — billing address, IP address, bank or card details, mobile phone country code, or payment service provider information. Most ecommerce platforms capture this automatically at checkout. The important part is retaining the evidence for the five-year ATO record-keeping requirement.

Are online courses subject to GST in Australia? Yes, in most cases. Online courses sold to Australian consumers by Australian sellers (or by overseas sellers through the simplified GST regime) attract 10% GST. Some educational services provided by qualified education institutions may be GST-free under separate rules, but most self-published online courses sold on platforms like Teachable, Thinkific, or Udemy are standard taxable supplies.

Can I claim GST credits on overseas software subscriptions like Canva or Adobe? Yes, if you’re registered for GST and the overseas provider is registered under Australia’s simplified GST regime (most major providers are, including Canva, Adobe, Mailchimp, Dropbox, Zoom, and similar). The GST charged on your subscription appears on your invoice and is claimable as an input tax credit on your BAS.

Get your digital product GST sorted properly

Digital products have specific GST rules that generalist bookkeepers and accountants often get wrong. Platform-specific treatment, customer location evidence, GST-free exports, and claiming credits on overseas software all require ecommerce experience to handle properly.

Our team provides GST compliance for ecommerce that covers digital products, physical goods, and mixed-model businesses across every major Australian ecommerce platform.

Get in touch with our team if you’d like your digital product GST setup reviewed before your next BAS.