GST to bite online low threshold goods, ‘Netflix’ services

Retailer groups are backing the move by Treasurer Joe Hockey this month after he said he would work with the states to introduce legislation to charge GST on intangible services coming into Australia such as media services and online low-threshold goods under $1,000.

Taxing intangible media and online services is being dubbed the ‘Netflix tax’.

‘We have an obligation to offer the States further integrity measures in relation to the collection of a tax that goes to them’, Mr Hockey said.

Taxing online goods of $1,000 and under is expected to collect over $400 million in GST revenue.
Australian Retailers Association executive director Russell Zimmerman said it is now time to apply GST to all goods purchased from overseas, with the Netflix initiative proving just how easy collecting such tax can be.

‘It should be just as easy to collect GST from Amazon as it is to collect GST from Netflix and Apple,’ he said. ‘The ARA has been leading the campaign to fix the under $1000 GST loophole for goods bought from overseas and is frustrated by vested interests slowing reform.

‘We know around 20 companies bring in about 80% of all overseas purchased goods. Australian retailers are also not being given a level playing field, and this is costing many local jobs.’

National Retail Association CEO Trevor Evans said the move would be welcome relief for Aussie retailers. “The NRA has been urging the government for years to close the unfair tax loophole and we’re pleased they have listened,” Mr Evans said.

“The Low Value Threshold (LVT) is allowing offshore online businesses to deliver to consumers in the Australian market without making any contribution to the GST take.’

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