Online purchases — how does this affect my business?
You run a small business. You buy things online — office supplies, tools, tech, packaging, maybe stock. A lot of it comes from Amazon, eBay, Temu, AliExpress, or other online marketplaces.
It feels simple. You buy it, it arrives, you use it in your business. Deduction, right?
Not always. And the GST side of it is where most small business owners get caught out.
The overseas supplier problem
When you buy from Amazon Australia, you might assume you're buying from an Australian company. Often you're not. A huge number of sellers on Amazon, eBay, and similar platforms are overseas suppliers who ship from international warehouses or use fulfilment centres in Australia.
These sellers typically:
- Provide a valid Australian tax invoice with an ABN
- Show GST as a separate line item on their invoice
- Issue a document that meets ATO requirements for a GST credit claim
- Respond to requests for a tax invoice after purchase
Some overseas suppliers have an ARN (Australian Registered Number) instead of an ABN. An ARN is not an ABN. Purchases from ARN-only sellers cannot support a GST credit claim for purchases over the $82.50 threshold (which is $75 + GST).
Order confirmations are not tax invoices
This is a big one. That email you get from Amazon saying "Your order has been confirmed" or "Your order has shipped" is not a valid proof of purchase for tax purposes.
An order confirmation typically shows what you ordered and how much you paid. But it usually doesn't include an ABN, doesn't show GST separately, and doesn't meet the ATO's requirements for a tax invoice.
An order confirmation email is not a receipt. It confirms you placed an order — not that the goods were delivered, not the final amount charged, and not the GST treatment. You need the actual invoice, which may be a separate document.
Amazon does provide downloadable invoices for some purchases — but availability depends on the individual seller. Many third-party sellers on Amazon never upload an invoice at all.
So what can you actually claim?
Let's break it down:
The expense itself — if the purchase is genuinely for business use, it's still a legitimate business deduction regardless of who sold it to you. Your income tax deduction doesn't depend on having a tax invoice.
The GST credit — this is where it gets tricky. To claim the GST credit (the 1/11th back on your BAS), you need a valid tax invoice showing the supplier's ABN and the GST amount. No valid tax invoice with GST shown = no GST credit to claim.
"You can still claim the expense as a deduction. But without a proper tax invoice showing GST, you can't claim the GST credit on your BAS. That's money you're not getting back."
How to handle online purchases in your books
1. Check the invoice, not just the order confirmation. Log into your Amazon account and go to Your Orders > Invoice. If an invoice is available, download it. Check whether it shows an ABN and GST.
2. Use the right GST code. If the invoice shows GST from an ABN-registered supplier, code it as GST on Expenses (your bookkeeper can claim the credit). If there's no GST shown, or the supplier has an ARN only, code it as No GST or GST Free.
3. Keep the actual invoice. Download and save it — either in Xero's file library, or in a folder your bookkeeper can access. The bank statement alone won't cut it.
4. Don't guess. If you're not sure whether GST was charged, don't just pick "GST on Expenses" because it looks right. Overclaiming GST credits is a red flag for the ATO and can result in penalties and interest.
- Australian seller with ABN + tax invoice showing GST: Claim the expense AND the GST credit
- Overseas seller, no ABN, no GST shown: Claim the expense only — no GST credit
- Seller with ARN only (no ABN): Claim the expense only — no GST credit over $82.50
- Order confirmation only, no invoice: Keep it as backup but get the actual invoice
- Mixed cart (some GST, some not): Code each line item separately
The bottom line
Buying online is easy. Getting the paperwork right for your books is the part most people skip — and it costs them money at BAS time. A few minutes checking invoices now saves headaches (and lost credits) later.