It appears that from 1 July 2017, all online purchases will attract Australian Goods and Services Tax (“GST”). In recent years, online shoppers have enjoyed the benefits of the exemption of GST on goods purchased for less than $1,000 from overseas retailers.
Due to a ‘low value importation exemption,’ items under $1,000 that are purchased from retailers such as Amazon, Wiggle, ASOS and Nordstrom do not attract GST when imported to Australia.
Since the introduction of GST in 2000, Australian retailers have been lobbying for the lowering or abolishment of the tax-free threshold as it provides an incentive to buy from foreign businesses.
As part of this year’s Federal Budget, the Treasurer announced that changes would be made to ensure GST extended to digital products and services imported to Australia from 1 July 2017. Combined with the proposed abolishment of the $1,000 threshold, foreign suppliers (with Australian sales exceeding $75,000 per annum) will be required to charge, collect and remit the GST on sales bound for Australia.
If you sell products to Australians or purchase goods from overseas and would like to know more about how these proposed changes could impact you, please contact our tax team: Murray Howlett, Josh Meggs and Kylee Smith on (07) 3023 1300.