As of July 2017, Australia requires non-resident entities like Twilio Inc to collect a Goods and Services Tax (GST) for any digital services sold to customers in Australia. This guide covers how Twilio charges GST, and what goods are taxable.
Notice: Twilio services consumption may be subject to state and/or local taxes in a number of areas. To see if Twilio collects taxes in your country, please see the Taxes section of our Support Help Center.
The following topics are discussed in this guide. Click a topic to skip directly to this information:
- Goods and Services Tax (GST) Overview
- When will Twilio start charging GST?
- How can I be Tax Exempt for GST?
- How do I enter my GST number?
- How is GST Determined?
- What Rate is GST Charged?
- I Forgot to Enter my GST Number, But am a GST Registered B2B customer - Can I Get a Refund?
- What is the Reverse Charge Mechanism?
- Will my Invoice be in Australian Dollars?
- Where Can I See the GST Charged?
Goods and Services Tax (GST) Overview
Australia passed legislation effective July 1, 2017 requiring non-resident entities selling digital services to collect and remit a 10% Goods and Services Tax (GST) on it sales to customers located in Australia. The tax only applies to inbound intangible goods sold to consumers, which broadly includes anything other than goods or real property to an Australian consumer. In addition, non-residents are only required to apply GST on Business to Customer (“B2C”) transactions. Business to Business (“B2B”) transactions will not be charged GST if a valid GST number is provided by the B2B customer. See Tax and Superannuation Laws Amendment (2016 Measures No1) Bill 2016.
When Will Twilio Start Charging GST?
Twilio will begin collecting GST on services sold to customers located in Australia starting October 2019.
GST for the previous month is assessed and applied to your account on the first day of each month for the previous month’s usage. For example, you will be charged GST for your October usage on November 1st.
How Can I be Tax Exempt for GST?
B2B customers will not be taxed with a valid GST number, which should be entered in the Twilio Project Console. However, B2B customers should self-assess the GST through the reverse charge mechanism.
Question: I am a business, but do not have a GST number. I am not required to register for GST since my business falls under the required sales threshold for registering.
Answer: The GST laws for nonresidents are designed to capture GST from B2C consumers, and from B2B consumers that fall under the sales threshold. Unless a B2B customer can provide a valid GST number, they will be taxed as a B2C. Nonresidents are not required to tax B2B customers with valid GST numbers, since B2B customers are supposed to self-assess the GST on their end.
How Do I Enter my GST Number?
B2B customers can enter their 11-digit GST number in the "GST Number" field on the Billing Preferences page in Console.
How is GST Determined?
GST is applicable based on the type of products or services that are purchased. We have determined that all of Twilio’s services are subject to GST.
Please confirm your service address is up to date in the Twilio Console for accurate taxation in the correct jurisdiction. For help updating your service address, see How do I Update my Billing Settings.
What Rate is GST Charged?
Twilio's services will be subject to the GST rate determined by the Australia Taxation Office.
For example, a customer in November 2019 would be charged the GST standard rate of 10% for all taxable sales. If this customer spends $1,500 with Twilio out of which $1,000 is taxable, they would be charged an additional $100 for GST, for a total of $1,600 ($1,500 + $100).
Total taxable sales: $1,000
Goods and Services Tax (GST) @ 10%: $ 100
+ Total sales: $1,500
= Total including taxes: $1,600
Examples of taxable Twilio products and services include the following:
- Outbound or Inbound SMS (e.g. AUSTRALIA Outbound SMS - Pivotel)
- Voice calls (e.g. Programmable Outbound Minute - Australia - Mobile)
- Flex (e.g. Flex - Active User Hours)
- Whatsapp (e.g. WhatsApp Outbound Template Message - Australia)
- Enterprise plan (e.g. Twilio Custom SaaS Monthly Fee)
Billing adjustments may also have tax implications:
- Credits applied against specific usage will refund you taxes at the same rate as the respective product (e.g. Credit - TURN Megabyte - Australia)
- Promotional balances are not taxable (e.g. Promo - Twilio.org)
- Minimum spend adjustments are taxed at the same rate as the respective product (e.g. Quarterly Min Spend Adjustment - Voice)
I Forgot to Enter my GST Number, But am a GST Registered B2B customer - Can I Get a Refund?
No. Refunds will not be issued if a B2B customer is inadvertently charged GST and later provides a valid GST number. B2B customers can reclaim the tax on their end when their GST return is filed.
What is the Reverse Charge Mechanism?
The Reverse Charge Mechanism is the process in which B2B customers are required to report GST charges. For more details, see What is the "Reverse Charge mechanism".
Will my Invoice be in Australian Dollars?
No. As a non-resident, Twilio is allowed to provide an invoice either in USD or AUD, but is required to provide a foreign exchange rate for the GST amount. Your invoice will be in the same currency as your pricing and console experience to provide you a consistent experience across Twilio. If your console experience is in USD, your invoice will be in USD with the foreign exchange rate at the bottom of the invoice.
Where Can I See the GST Charged?
GST can be found on your invoice in the Usage Summary section under “Taxes”. This line item represents the GST charged.
Taxes are also visible in the Invoice Details section, where we specifically call out any GST charged.
The foreign exchange rate between AUD and USD is also mentioned on the invoice.
For more details, please see Reading your Twilio Invoice.