I've reported over at APC about how eBay is being asked to help the Australian Taxation Office in identifying high-volume sellers who aren't declaring their income. While most people are unlikely to fall into that category, the rules applying to tax and eBay can be a bit confusing. Here's our quick guide to what you need to consider.
Should I be putting income from eBay on my tax return?
The short and sharp answer is yes: even if you've only sold a couple of things on eBay during the year, that income should go on your tax return. You might conclude that it isn't worth the ATO's while to track down an extra $200 (or whatever) of garage-sale-style-income for someone already paying regular tax via their salaried job — and many casual sellers certainly don't declare these types of earnings — but in theory you should place it in the supplementary section of a standard tax return as additional income. People pursuing eBay as a career definitely wouldn't want to take the risk of not declaring, since eBay has made it clear that it shares details of high-selling individuals with the ATO.
If I'm a professional seller, should I charge GST on my sales?
GST (Goods And Services Tax) is charged on virtually everything in Australia, but at eBay the rules are slightly different. Individual sales by non-professionals are considered to be GST-free for the seller, so if you're just getting rid of the unwanted birthday present, it's not a problem. However, if your income from eBay is above the threshold for GST registration — currently $75,000 — then you do need to consider GST. This doesn't mean that you can charge buyers an extra 10%: it means that you have to set aside 1/11th of the final sale price for auction items and consider that as GST owed to the Tax Office. eBay has an FAQ on GST which goes through all this in great detail. If you're operating a business, you're likely to be registered for GST in any case, since you can claim any GST charged on business expenses as offsets against GST you owe. (As usual for financial stuff, the disclaimer: This is general advice. If you have concerns about your specific tax situation, consult a qualified professional.)