GST on App Store Sales: Apple, Google and Australian SaaS

"Apple handles the GST" is one of the most common things we hear from app and SaaS founders. It is also only sometimes true. Since 1 July 2017, Australian GST law has applied to imported services and digital products sold to Australian consumers, and special rules shift GST collection onto large digital platforms in many cases.

The catch is that those rules were designed for offshore sellers. If your business is based in Australia, the outcome depends on your platform contract, and Apple and Google have chosen opposite approaches. Treating them the same is how BAS errors get made. In this guide, our SaaS and tech accounting team explains who accounts for GST in each scenario, and how to map it correctly in Xero.

What Is an Electronic Distribution Platform (EDP)?

The definition sits in section 84-70 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act). The Apple App Store and Google Play are the obvious examples, but the rules also capture marketplaces selling software, games, e-books, streaming content and similar digital products.

The exclusions matter just as much. According to the ATO's guidance for EDP operators, a service is not an EDP if it only provides a carriage service, access to a payment system or payment processing, or advertising that links customers to a merchant's website. A service does not become an EDP merely because it processes payments, so in a standard direct website sale the GST obligation remains with the merchant. The ATO's detailed view is set out in Law Companion Ruling LCR 2018/2.

Who Pays GST When an App Is Sold Through an EDP?

This is the central rule in section 84-55 of the GST Act. Where an inbound intangible consumer supply is made through an EDP, the operator, not the underlying merchant, is treated as the supplier. An inbound intangible consumer supply is broadly a supply of anything other than goods or real property to an Australian consumer, unless the thing is done wholly in Australia or supplied wholly through an enterprise carried on in Australia (section 84-65). You can read the full provisions in the GST Act on the Federal Register of Legislation.

The ATO confirms in its guidance for merchants that where the EDP operator is responsible for GST, those platform sales do not count toward the merchant's GST turnover. But if the same offshore seller also sells directly through its own website to Australian consumers, it may still need to register and charge GST on those direct sales once it crosses the threshold. We cover the domestic equivalent in our guide to GST for Australian e-commerce sellers.

One more nuance that matters for B2B SaaS: a customer is only an "Australian consumer" if they are an Australian resident who is either not registered for GST, or registered but not buying for their business (section 9-25(7) of the GST Act). A supplier can treat a customer as a business customer where it takes reasonable steps and holds the customer's ABN and a statement that they are GST-registered (section 84-100). This is why platforms and offshore sellers ask business buyers for ABN and GST registration details at checkout.

Does Apple or Google Always Handle GST for Australian Developers?

This is the point most app businesses miss. Sales by an Australian developer to Australian customers are made through an enterprise carried on in Australia, so they are not inbound intangible consumer supplies and the default EDP rule simply does not reach them.

Instead, section 84-60 of the GST Act allows an EDP operator to agree in writing to treat certain digital supplies made through its platform as if they were inbound intangible consumer supplies. The ATO confirms an operator can take responsibility for GST on sales by Australian-based merchants where the agreement exists before the sale and the operator is registered for GST. In other words, the legislation hands the decision to the platform contract. Your developer agreement and platform tax settings determine the outcome, which is why reviewing them is a core part of small business tax compliance for app businesses.

How Does the Apple App Store Treat GST for Australian Developers?

Apple's App Store Connect guidance for Australia states that Australia-based developers must provide their ABN and proof of GST registration. This is Apple's commercial requirement, and it applies regardless of whether you would otherwise need to register for GST under the ordinary $75,000 threshold.

The mechanics sit in Apple's Developer Program terms. The Australian exhibit to Schedules 2 and 3 provides that the developer and Apple Pty Ltd enter into an arrangement under section 153-50 of the GST Act. Under that arrangement, Apple is treated as making the supplies to end users, and the developer is treated as making corresponding supplies to Apple. Apple issues the customer-facing tax invoices in its own name and issues recipient-created tax invoices (RCTIs) to the developer.

The practical effect: you still report GST as an Australian developer, using Apple's RCTIs, and you must not double-count. You do not issue tax invoices to Apple or to end users; you report from the RCTIs and the financial reports Apple provides. In our experience working with startup and SaaS clients, the most common error is reporting GST on both the gross App Store sales and the RCTI amounts. If you are setting up from scratch, our startup accounting and advisory team can build the revenue workflow correctly from day one.

How Does Google Play Treat GST for Australian Developers?

Google takes the opposite approach to Apple: same EDP rules, opposite contractual outcome for Australian developers. Google's Play Console tax guidance is explicit: for Australian customers buying from offshore sellers, Google sets, charges and remits the 10% GST; for developers located in Australia, the GST obligation stays with the developer.

Two further points from Google's tax responsibility guidance catch businesses out. First, where a customer pays through an alternative billing system rather than Google Play's billing, the developer is responsible for any GST due, wherever the developer is located. Second, if an Australian developer is not registered for GST, Google may charge 10% GST on the service fee the developer pays to Google, which makes the platform more expensive for unregistered sellers.

The takeaway for an Australian developer selling on both stores: your Google Play sales to Australian customers are your GST problem, your Apple sales run through an agency arrangement with RCTIs, and the two must be mapped differently in your accounting file.

What About Direct Website Sales Through Stripe or Shopify?

The GST Act carves payment systems out of the EDP definition, so in a standard direct sale through Stripe, PayPal or a Shopify checkout, the GST obligation stays exactly where it started: with you as the supplier under the ordinary taxable supply rules in section 9-5. Sales to overseas customers may be GST-free under the export rules in section 38-190, but this is conditional treatment, not an automatic exemption, and worth confirming before you switch off tax on foreign invoices.

This is where blended revenue models get messy. A typical Australian SaaS business might collect App Store subscriptions, Google Play subscriptions and direct Stripe payments at the same time, each with different GST treatment. Our e-commerce accounting team sees the same pattern with marketplace and direct-channel retailers, and the discipline is identical: treat each channel as its own revenue stream with its own tax logic.

How Do You Report App Store Sales on Your BAS?

Map each revenue stream separately in Xero before the BAS is touched. The table below summarises the usual position for an Australian GST-registered developer. Platform agreements can vary, so confirm your own terms and tax reports before relying on it.

A few practical rules we apply when preparing app-business BAS lodgements:

• Reconcile Apple and Google payout reports separately each month. The platform commission, foreign taxes withheld and refunds all land differently in each report.
• Confirm whether GST appears on the RCTIs or merchant tax reports before deciding what goes at 1A. Never assume the two stores match.
• Record platform commissions as an expense rather than netting them silently against revenue, so GST is calculated on the right base.
• Map each stream to its own revenue account and tax rate in Xero. The same structure we recommend for Shopify sellers in Xero works for app stores.

Getting this wrong is not a trivial risk. The ATO's estimated net GST gap rose to $8.7 billion in 2023-24, and GST reporting remains a sustained compliance focus. Late or incorrect lodgement also attracts penalties, which we cover in our guide to late BAS lodgement penalties. Structured bookkeeping and professional BAS and IAS lodgement support keeps each stream clean before anything reaches the ATO.

The Bottom Line

The EDP rules were built to shift GST collection onto large platforms for offshore consumer sales, and for offshore sellers they mostly do exactly that. Australian SaaS and app businesses should never assume Apple or Google remits GST on their behalf. The correct treatment turns on five things:

• Whether the seller is Australian or offshore
• Whether the customer is an Australian consumer or a business customer
• Whether the sale runs through the platform's billing system or an alternative
• Whether the platform agreement shifts GST responsibility, as Apple's does and Google Play's does not
• What the platform tax reports and invoices actually show

The safest practical approach: reconcile Apple and Google reports separately, confirm whether GST is included in RCTIs or merchant reports, and map each revenue stream correctly in Xero before the BAS is lodged.

Frequently Asked Questions