Selling through online marketplaces — eBay, Amazon Australia, Etsy, Facebook Marketplace, and similar platforms — is now a significant revenue stream for many small businesses and sole traders. The GST obligations for marketplace sellers changed significantly in 2018 when the marketplace operator rules were introduced, transferring the GST collection obligation from the seller to the platform for certain transactions. Understanding how these rules work is essential for correct BAS preparation and income reporting.
The Marketplace Operator Rules: Who Collects the GST?
From 1 July 2018, the electronic distribution platform rules under Division 84 of the A New Tax System (Goods and Services Tax) Act 1999 make the marketplace operator responsible for collecting and remitting GST on eligible low-value imported goods (customs value of $1,000 or less) sold to Australian consumers by sellers not registered for GST in Australia. From 1 July 2020, the rules extended to all goods, services, and digital products sold through qualifying marketplaces.
In practice, three scenarios:
Scenario 1 — GST-registered Australian seller, Australian buyers: The seller collects and remits GST. The platform does not handle this. Gross sales must appear at G1 on the seller's BAS.
Scenario 2 — Overseas seller or unregistered Australian seller, Australian buyers: The platform collects and remits GST on the seller's behalf under the EDP rules. The seller's Australian GST obligations on those sales are discharged.
Scenario 3 — Australian seller, overseas buyers: Sales are zero-rated exports (GST-free under s.38-185), provided goods are physically exported. No GST charged; export documentation is the evidence.
For bookkeepers serving domestic marketplace sellers, Scenario 1 is the standard case. The client receives net settlements (gross proceeds minus platform fees), but must declare gross sales on the BAS.
Revenue Recognition: Gross Sales vs Net Deposits
The most common bookkeeping error for marketplace sellers is recording only the net deposit (after platform fee deduction) as revenue. This understates both turnover and GST collected.
The correct treatment is: gross sale price as revenue, platform fees as operating expense (with ITC on GST-bearing fees). The net bank deposit is the arithmetic result — not the correct revenue figure.
For income tax, gross revenue matters for the SBE $10 million aggregated turnover threshold. A seller with $9.8M gross marketplace sales but $8M in net deposits after fees is above the SBE threshold.
Revenue recognition under AASB 15 occurs at dispatch for physical goods or at delivery for digital goods.
GST on Platform Fees
eBay, Amazon, and Etsy selling fees are taxable supplies — the marketplace provides a service (platform access, payment infrastructure) for which the seller pays. Where the platform is GST-registered and provides a tax invoice, the seller can claim an Input Tax Credit on the fee.
Platform fee invoices are available through the seller's account portal monthly or per-settlement. The bookkeeper must download these — the fees are deducted before the bank deposit, so they do not appear as a separate bank transaction.
Payment processing fees (PayPal, Stripe, platform-native payment systems) are input-taxed financial supply fees. No GST applies; no ITC is available.
Foreign Currency Sales and Exchange Rates
Sellers on Amazon.com or Etsy.com in USD or other currencies must convert to AUD for bookkeeping and GST purposes. The RBA mid-rates or actual bank/platform conversion rates are both acceptable under the ATO's guidelines.
Foreign currency gains and losses — the difference between the rate at which the sale was recorded and the rate at which proceeds were converted — are assessable income or deductible under s.775 of the ITAA 1997. For high-volume USD sellers, these can be material.
Record-Keeping Requirements
The ATO requires records for five years: date, buyer's country, sale amount (original currency and AUD equivalent), GST treatment, and export evidence for overseas sales. Maintain independent copies of marketplace settlement reports — platform records are inaccessible if the account is suspended.
Settlement reports reconcile to each bank deposit. The cycle varies (Amazon weekly, eBay bi-weekly, Etsy monthly). Transaction-level reconciliation — not just deposit amount matching — is required for a complete audit trail.
How Reconlink Supports Marketplace Sellers
Marketplace businesses receive settlement deposits that each represent dozens of underlying transactions. Reconlink's automated coding rules recognise Amazon, eBay, Etsy, and Shopify settlement patterns and code them to gross revenue accounts, with a corresponding platform fees entry. Importing each statement captures all settlement deposits and any direct-debit fee charges. BAS export aggregates gross sales at G1 and GST collected at 1A, producing the BAS position from reconciled transaction data without a separate settlement report reconciliation.