Yes. Dropshipping is a business from the day you open the store, not a hobby that becomes one later. You are buying and reselling at a margin, through a system you have set up, with the intention of making a profit. That is carrying on an enterprise on every measure the ABR uses, which means an ABN. GST follows the ordinary rule: compulsory from $75,000 of turnover.
Why there is no hobby stage
The features of a business the ABR lists read like a description of a dropshipping store: commercial sales of products, an intention to make a profit, a repeated activity, systematic and organised and carried on in a business-like way, and carried on in a similar way to others in the industry.
A store with a payment gateway and a supplier arrangement ticks all of them before the first order. That is what separates dropshipping from selling a few things you made: there is no version of it that is a private recreational pursuit.
Nor does low revenue help. There is no minimum turnover before an ABN is required, only a threshold for GST, and they are different questions.
Does dropshipping need GST registration?
Not at the start, for most people. The ordinary rule applies: register once your GST turnover reaches $75,000 in a 12-month period, or once you expect it to. Nothing about dropshipping brings that forward the way carrying passengers does for rideshare.
Two things to keep in view:
- Turnover is not profit. The $75,000 test looks at your gross sales, not your margin. A store on thin margins can pass the threshold while barely making money, and it is a common way to be caught out.
- You have 21 days. business.gov.au is specific: you must register within 21 days of becoming aware your GST turnover will go over the threshold. If growth is fast, check monthly rather than at year end.
The import side, briefly and honestly
If your supplier ships from overseas, GST on imported goods is its own body of rules and it depends on who is treated as the importer, the value of the goods, and whether the overseas supplier is itself registered. It is genuinely complicated and it is where dropshipping tax advice on the internet is least reliable.
What we will say plainly: this is general information, not advice about your arrangement. Get a registered tax agent to look at how your specific supply chain is structured before you assume the GST position, particularly if you are selling low-value goods into Australia from an overseas supplier.
What the platforms expect
Shopify, marketplaces and payment providers will generally ask for an ABN when you set up as an Australian seller. Some of it is their own compliance and some is tax reporting, but the practical effect is the same: sorting the ABN out first saves you doing it under pressure with a store already live.
And the ordinary rule applies to anyone paying you as a business. Without an ABN quoted, they must withhold 47% of anything over $75 excluding GST. For a store selling to the public that rarely arises, but it does the moment you sell wholesale or take on a business customer.
Setting up, in order
- ABN first, before the store goes live, describing the activity accurately. "Online retail of homewares" rather than "online business".
- Leave GST off until you are approaching the threshold, unless you have a reason to register early such as wanting to claim credits on setup costs.
- Track gross sales monthly against the $75,000 test, not annually.
- Keep supplier invoices and platform fee records from the first order. Reconstructing a year of them later is the part everyone underestimates.
- Get advice on the import GST position if your goods come from overseas.
Common questions
Do I need an ABN for dropshipping?
Yes, from the start. A dropshipping store involves commercial sales, an intention to profit and an organised, repeated activity, which is carrying on an enterprise. There is no minimum turnover before an ABN is required.
Do I need to register for GST for a dropshipping store?
Only once your GST turnover reaches $75,000 in a 12-month period, or once you expect it to, and then within 21 days of becoming aware. Note the test is gross sales, not profit, which catches thin-margin stores.
Can dropshipping be a hobby if I barely make anything?
Realistically no. Low revenue does not make it a hobby when the activity is a systematic commercial operation set up to make a profit. The hobby test looks at how the activity is carried on, not how well it is going.
What about GST on goods coming from overseas?
It depends on who is treated as the importer, the value of the goods and the overseas supplier's own registration. It is a genuinely complicated area and worth getting a registered tax agent to look at your specific arrangement rather than working from general guidance.
Does Shopify require an ABN?
Platforms and payment providers generally ask Australian sellers for one as part of setup. Whatever the platform requires, the tax position is unchanged: running the store is carrying on an enterprise.
Can I use my existing ABN for a dropshipping store?
Yes, if it is active and held by you as an individual. One ABN covers every activity you run as a sole trader. Check its status first, because an ABN cancelled for inactivity will not work.
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