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Australia levies 10% GST on foreign e-Commerce

  • Aug 24, 2015 | Richard Asquith

Australia levies 10% GST on foreign e-Commerce

Australia has announced plans to include the sale of goods to consumers from foreign resident e-Commerce sites within the 10% Goods & Services Tax net. The change will come into affect on 1 July 2017.

15 June 2017 Update: the House of Representatives approved this enacting Bill this week.  The Bill now passes to the Senate and is still on course to go live on 1 July 2017.

The decision was taken last week by the Abbott government in conjunction with representatives of the Australian states. It is estimated that the change could raise AUS$ 1billion for administrative costs of just AUS$ 37million per annum.

This change to goods coincides with Australia’s plans to levy GST on digital services from abroad.

Oversees GST relief to be scrapped

Currently, Australian consumers may purchase books, films, toys furniture etc. from foreign sites without a 10% GST charge provided each dispatch is below AUS$ 1,000. This is a similar concept the European Union’s low value consignment stock relief; but is typically below €20 per dispatch.

Any foreign website selling to consumers will have to GST register as a non-resident trader once their annual sales go about the Australian GST registration threshold. This is currently AUS$ 75,000 per annum.

The principle reason of the change is to give Australian-based e-Retailers a levy playing field on taxes.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara