You’ve had your first order come through from a customer in New Zealand or the US, and now you’re staring at your Shopify checkout wondering whether you should have charged GST on it. It’s one of the most common questions we get from Australian merchants who are starting to sell internationally, and it’s a fair question, because Shopify’s default tax settings don’t automatically know your business’s tax obligations. They just apply whatever rates you’ve configured.
This post covers the general operational picture: how GST-free treatment for exported goods generally works under Australian tax law, and, more importantly for the purposes of this article, how to actually configure Shopify so it applies (or doesn’t apply) GST correctly based on where an order is shipping.
Important note before we go further: this article is general operational and technical guidance for setting up Shopify’s tax settings. It is not tax or legal advice. GST rules, thresholds and timeframes can change, and your specific circumstances (what you sell, how you ship, who your customer is) can affect how the rules apply to you. Always confirm your GST treatment with a registered tax agent, BAS agent, or the ATO directly before relying on it for your BAS.
The General Rule: Exported Goods Are Often GST-Free
Under Australian GST law, goods that are exported from Australia are generally treated as GST-free, provided certain conditions are met. One of the conditions commonly referenced in ATO guidance relates to a timeframe for the goods to actually leave Australia after the sale, general ATO guidance points to a window of around 60 days from the date of the sale (or the date of the first part-payment, in some cases) for the export to occur for GST-free treatment to apply. If goods aren’t exported within the required timeframe, or the conditions aren’t otherwise met, GST may need to be charged.
This is genuinely general information, not a complete statement of the law. There are nuances around:
- What counts as the “date of the sale” for timing purposes
- Different treatment for exported goods versus GST-free supplies for consumption outside Australia
- Different treatment for digital products and services versus physical goods
- Record-keeping requirements to substantiate the export (freight and shipping documentation is generally important here)
None of that is something a Shopify tax setting can determine for you, it’s a legal and accounting question. What Shopify can do is apply the right tax rate at checkout based on the shipping destination, so your storefront reflects the treatment your accountant has confirmed applies to your business.
How Shopify Decides Whether to Charge GST
Shopify determines the tax to apply on an order primarily based on the customer’s shipping address, specifically, the destination country (and, for domestic AU orders, the state) entered at checkout. This is what triggers Shopify’s tax engine to apply your Australian GST rate, a different country’s rate, or no tax at all, depending on how your tax settings and any overrides are configured.
This matters practically: if a customer selects a shipping address outside Australia, and your settings are configured correctly, Shopify should not apply your 10% AU GST rate to that order. If your settings are wrong, it might apply GST anyway, or worse, apply no GST to a domestic order that should have it.
Setting Up Shopify’s Tax Settings for Exports
Here’s the practical configuration path. In your Shopify admin, go to Settings > Taxes and duties.
1. Confirm your base Australian tax settings
Under the Australia region setting, Shopify will typically have you registered for GST with a 10% rate applied to domestic sales once you’ve entered your ABN and confirmed GST registration. This is your default, the rate that applies to orders shipping within Australia.
2. Check whether your prices are tax-inclusive or tax-exclusive
In Settings > Taxes and duties, there’s a setting for whether your product prices already include tax. This matters a lot for exports:
- If prices are tax-inclusive (the norm for most AU consumer stores, since displayed prices should include GST for local shoppers), Shopify will back out the GST component when the order is going to a GST-free destination, so the customer pays the ex-GST price rather than the price plus GST.
- If prices are tax-exclusive, GST gets added on top for domestic orders and should not be added for qualifying export orders.
Get this setting wrong and you’ll either be absorbing the GST margin on export sales or, worse, undercharging domestic customers. It’s worth checking this setting explicitly rather than assuming it’s right, especially if the store was set up by someone other than your current team.
3. Set up a tax override for international zones
This is the key mechanism for exports. Under Settings > Taxes and duties > Australia, you can add a tax override that applies a 0% rate to specific countries or regions, or you can rely on Shopify’s default behaviour where non-Australian shipping destinations don’t get the AU rate applied to begin with (Shopify generally only applies a region’s tax rate to orders shipping to that region).
The override function is more relevant when you want to be explicit about GST-free treatment for a defined product collection shipping overseas, or when you’re dealing with a product type that needs special handling (like exported goods that would normally be taxable domestically but qualify as GST-free when exported). You can create a collection of relevant products and apply a country-specific override so the GST-free treatment applies consistently rather than depending on manual checks per order.
4. Review your Markets setup if you’re using Shopify Markets
If you’re selling internationally through Shopify Markets (Shopify’s tool for managing multi-country storefronts, pricing, and localisation), each market has its own tax settings. Check that your export markets aren’t inadvertently inheriting an Australian tax rate. This is a common gap, merchants configure GST correctly for their default AU market but don’t check the tax behaviour of markets added later for NZ, US, or UK customers.
Common Mistakes We See
- Leaving a default AU rate applied globally. Some legacy store setups apply GST at checkout to all orders regardless of destination. If you’ve never explicitly reviewed your tax settings against your shipping zones, it’s worth checking this now, it’s the single most common issue.
- Assuming digital products follow the same rule as physical exports. Digital products and services sold to overseas customers can be subject to different GST treatment than physical goods that are freighted out of the country. Don’t assume a digital download or subscription automatically gets the same GST-free treatment as an exported physical product without checking with your accountant, the tests are different.
- Not keeping export evidence. Even when Shopify’s checkout correctly shows $0 GST, you may still need shipping and export documentation to substantiate the GST-free treatment if the ATO asks. Your fulfilment and shipping app data (tracking numbers, delivery confirmations) can help here.
- Confusing “no GST charged” with “correctly exempt.” Just because a checkout shows no GST doesn’t automatically mean the sale legally qualifies as GST-free, it just means your settings told Shopify not to apply it. The legal test and the technical setting are two different things, and it’s worth having your accountant sign off on the logic behind your settings, not just the settings themselves.
- Mixing up B2B and consumer export rules. If you run wholesale or B2B alongside your DTC store, GST treatment on exported wholesale orders can involve additional considerations (like who is the exporter of record). This is worth a specific conversation with your accountant if B2B exports are a meaningful part of your revenue.
A Practical Setup Checklist
- Confirm your ABN and GST registration details are correctly entered in Shopify admin under Settings > Taxes and duties.
- Confirm whether your listed prices are tax-inclusive or tax-exclusive, and that this matches what your accountant expects.
- Test a checkout with an Australian shipping address and confirm GST is applied correctly.
- Test a checkout with an overseas shipping address (NZ, US, UK are good test cases) and confirm GST is not applied, assuming that’s the treatment you expect.
- If you sell digital products or services, review their tax treatment separately from physical exported goods.
- If you use Shopify Markets, check tax settings in each individual market, not just the default one.
- Document your export process (freight, tracking, timing) so you have evidence to support GST-free treatment if it’s ever queried.
- Get your accountant or a registered tax agent to review the setup against your actual sales mix at least once a year, or whenever you add a new export market.
If your store setup involves multiple markets, product types with mixed tax treatment, or historical checkout data that suggests GST may have been applied or omitted incorrectly, that’s a good trigger to get a specialist to review the configuration rather than guessing. Our Shopify GST setup guide walks through the admin configuration in more detail if you want a reference to work from alongside your accountant’s advice.
When to Bring in Specialist Help
Getting Shopify’s tax settings technically correct, tax-inclusive vs exclusive pricing, overrides, Markets configuration, is something a Shopify specialist can help you set up and test properly, especially if you’re migrating platforms, adding new export markets, or cleaning up a store that’s had inconsistent settings for a while. Confirming what GST treatment should legally apply to your sales is a separate job for your accountant or the ATO, the two pieces of advice work together but aren’t a substitute for each other.
FAQ
Do I need to charge GST on orders shipping to New Zealand or other overseas destinations?
Generally, goods physically exported from Australia can be GST-free if the relevant conditions are met, including export timing. Whether GST-free treatment applies to your specific sales is a tax law question for your accountant or the ATO, this article only covers how to configure Shopify’s settings to reflect whatever treatment you’ve confirmed applies.
What is the 60-day rule the ATO refers to for exports?
ATO general guidance on GST-free exports references a timeframe (commonly discussed as around 60 days from the date of sale) within which goods generally need to leave Australia for GST-free treatment to apply. This is general information only, confirm the current rule and how it applies to your circumstances with the ATO or a registered tax agent, as timeframes and conditions can change.
Does Shopify automatically know not to charge GST on export orders?
Shopify applies tax based on the shipping destination and your configured settings, it doesn’t independently assess whether a sale legally qualifies as GST-free. You (or your specialist) need to configure Settings > Taxes and duties correctly, including your tax-inclusive/exclusive setting and any overrides, so the checkout reflects the treatment that actually applies to your business.
Do digital products sold overseas follow the same GST rule as physical exports?
Not necessarily. Digital products and services can be subject to different GST rules than physical goods that are freighted out of Australia. If you sell digital products alongside physical inventory, treat their GST setup as a separate question and confirm it with your accountant rather than assuming the export rule for physical goods applies.
What happens if I’ve been charging GST incorrectly on export orders?
If you suspect your Shopify tax settings have been applying GST incorrectly (either charging it when it shouldn’t have been, or not charging it when it should), pull an export of affected orders from Shopify admin and take it to your accountant or BAS agent to assess any correction needed on past BAS lodgements, then fix the underlying Shopify configuration so it doesn’t keep happening.
Next Step
If you’re not confident your Shopify tax settings reflect how GST should actually be applied to your export orders, book a strategy call or start with a Shopify audit, we’ll review your store’s configuration (not your tax position, that’s your accountant’s job) and flag anything that looks off before it becomes a bigger cleanup job.
