The Complete Australia Import Tax Guide

Being Australia’s second largest trading partner in the ASEAN region, Malaysia holds key prominence in the trade industry Down Under. A two-way trade that amounts up to US$25b according to, the Australian High Commision, both countries remain closely connected on the trade routes. In 2019 alone, Malaysian exports to Australia totalled US$6.85b, with fuels, consumer goods and raw materials being the top three products traded, reports the World Bank.

Australia remains a key playground for Malaysian businesses looking to expand beyond geographical boundaries.

In 2020, imports made up 18% of Australia’s 2020 GDP, according to statistics by the Organisation for Economic Co-operation and Development. Moreover, in November 2021, the Observatory of Economic Complexity reported an 11.1% growth in imports, from AU$25.9b to AU$28.8b. The top imports were electric machinery and parts, medicinal and pharmaceutical products, telecommunications and sound recording equipment, and manufactured metals. These signify opportunity areas for businesses around the globe looking to expand into Australia.

Whether you are an established enterprise or want to start a business in Malaysia with Australia as one of your key global target markets, rest assured that its booming economy, strong governance and stability will translate to positive returns.

Let's deep dive into Australia's Import tax and duties below.

How much is import duty in Australia?

Australia typically charges a 5% import or customs duty of the value of goods when converted to Australian dollars. However, with the MAFTA, Malaysian businesses do not need to pay any import duty. However, this is subject to fulfilling the Rules of Origin (ROO) criteria set out in the agreement.

Which goods are subject to 0% customs duty in Australia under the MAFTA?

To avoid paying import tax in Australia when shipping goods from Malaysia, your product must be deemed an originating good. You can enjoy 0% import duty under the MAFTA as long as your goods are:

• Completely produced in Malaysia

• Produced exclusively from originating materials in Malaysia

• Satisfies provisions set out by the Product Specific Rules

Any good that does not meet the Product Specific Rules can still be classified an originating good and enjoy preferential rates of import fees in Australia if the:

• Value of the non-originating materials used to produce the good did not exceed 10% of Free on Board (FOB) value of the good.

• Weight of all non-originating materials used to produce the good did not exceed 10% of the total weight of the good. This only applies to goods under the Chapters 50 to 63 of the Harmonised Commodity Description and Coding System (HS).

What documents must I produce to enjoy 0% import tax and duty in Australia?

The MAFTA requires that you support your claims for originating goods with a Certificate of Origin, issued by the Malaysian Ministry of International Trade and Industry. At any time, the Malaysian government may waive the requirement of the Certificate of Origin for Malaysian businesses exporting to Australia, and replace it with the Declaration of Origin. Both documents are valid for one year.

In addition to the above, the Australian authorities will require the following documents for customs clearance:

• Airway bill

• Commercial invoice

• Packing list

• Insurance policy (if applicable)

• Other permits and licences where relevant

Do I need to pay GST when importing goods to Australia?

According to the Australian Border Force, a 10% GST is payable on all taxable goods being imported into Australia unless there is a customs duty concession or GST exemption, in pursuant to Australia’s legislation. While the 0% import duty may be interpreted as a customs duty concession, the MAFTA does not explicitly detail the provisions of GST. You are advised to get in touch with your legal or compliance counsel for advice on GST matters when shipping goods from Malaysia to Australia.

When planning your shipments from Malaysia to Australia, engaging a reliable delivery partner lets you plan all customs clearance procedures with ease, from shipment consolidation to single customs clearance. Staying abreast of recent trade developments is important when doing business beyond geographical borders — an experienced logistics provider will offer quotes that best suit your needs against market conditions. Create an account with us and read more tips on shipping overseas, especially helpful for Malaysia small and medium enterprises.