Ask LH: Do Casual Google Developers Need To Register With The ATO?

Dear Lifehacker, I am an enthusiastic Android user and I am looking at creating some Android apps to sell on the Play Store. I don't plan to give up the day job, but instead develop some apps in my spare time. What are my tax implications? Do I need to register with the ATO? I'm also considering emigrating to be closer to my family in the next few years. What are the implications if I move countries? Would I need to de-register with the ATO then? Thanks, Forever Bamboozled By Tax

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Dear FBBT,

Tax issues are often complicated, and the best thing to do if you're at all confused is to consultant with a professional (that is, an accountant or other tax specialist). The answers to your questions seem fairly clear, and we'll offer some general advice, but that should not be taken as a definitive statement on your individual situation.

The basic tax implications of earning any income are simple and straightforward: yes, you should declare your income, just as you should with any money you earn. While you might be able to get away with not declaring the income from a one-off garage sale, that's not going to work so well with apps: the income from a digital platform is much more readily traced, since it will invariably paid through channels that will also report that income. Apple and Google might not be model citizens when it comes to how much corporate tax they pay in Australia, but that doesn't mean you can assume your own earnings will stay secret.

In the case of Google Play, Google automatically charges incorporates relevant local taxes (including the GST) into the price for any apps sold to Australians. Google's own developer guidelines make it clear that the onus is on the developer to ensure that money is paid to the ATO.

As such, you'll need to register for an Australian Business Number (ABN) and submit a Business Activity Statement (BAS). If you're a very small-scale developer, you can potentially do this annually rather than quarterly. Being registered also means you can offset GST paid on relevant business expenses, but be realistic: claiming for thousands of dollars worth of IT gear when you have only earned a few dollars from apps isn't likely to fly.

On your final question about moving: assuming you haven't set yourself up as a company while in Australia, if you move overseas, your app earnings can fairly easily move with you. Change your registered address with Google (or whoever) to your new location, and you'll have a new set of tax issues to deal with.

Cheers Lifehacker

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    Only income from business is assessable under australian tax law - i.e. income from hobbies are not assessable. From my understanding of the question it looks like FBBT is in a hobby ("not quitting his day job") and thus should not be declaring any income or preparing a BAS or registering for ABN.

    In deciding whether income generated is from a business or a hobby (assessable or non assessable) you should look at the below link from the ATO which provides more specific tests:

    But from the information provided in the question there are no tax implications with money earned from developing apps so long as it is a 'hobby'.

    GST is an interesting one - my understanding is you have to be turning over $75k before you need to register for GST.

    There is also concessions for making a bit of pocket change out of hobbies, and actually running a business. Last time I recall that you either have to be turning over $20k before what you do is considered a business, and attracts tax, but if you make less, but operate like a business (lotsa formal paperwork, etc.) then that attracts tax anyway.

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