Australian online shoppers and Netflix to be fully taxed in 2017 Australia has decided to scrap a tax exemption for imported goods bought online. Australia levies a ten per cent “goods and services tax” (GST, think VAT, British readers and sales tax in North America) on wide range of goods, but currently exempts imported items valued at less than AUD$1,000 from the tax. The nation's now …
"The second hoped-for effect is to make life easier for Australian retailers, who complain they cannot match offshore players on price."
The local retailers by and large still won't be competitive. There is a PC bits shop near me that charges way under RRP which is cometitive with foreign prices, but that's about it.
Those who set the RRPs in Australia are taking the piss.
Going after big content to pay tax will be fairly easy. But there is a reason all my goods come marked as:
"Gift"
"Warranty, replacement"
"Faulty replacement"
"Personal import"
It's not worth going after eBay and general online sales; as was noted by the prior report. The cost to check/police everything at the boarder will be massive and slow down deliveries. Basically build a false economy where the government makes no extra cash, but punters have to pay more for good, thus slowing the economy in general. I like how the government thinks it'll have any luck sending tax officials overseas to ask them to charge a foreign tax. That's almost cute.
eTailor: "Hello Mr. Australian Tax official, what can I do for you?
Tax Official: "We want you to charge, collect and forward an Australian Tax on orders sent to Australia, to the ATO."
eTailor: "Hmm, let me think... How about you get bent, and we call it even?
Tax official: "Why do people keep saying that to me?" *walks off confused*
Jordan Allen
manitoublack@gmail.com
eTailor: "Hello Mr. Australian Tax official, what can I do for you?
Tax Official: "We want you to charge, collect and forward an Australian Tax on orders sent to Australia, to the ATO."
eTailor: "Hmm, let me think... How about you get bent, and we call it even?"
Tax Official: "We will hold your packages at the customs until the customer pays the GST. A $20 fee will be charged to the delivery service who will be responsible for collection of the GST."
eTailor: "Umm... thats going to annoy our customers"
eTailor: "So we collect 10% and submit payment 28 days after the end of each month?"
Tax Official: "Yes"
eTailor: "Express delivery of packages through customs?"
Tax Official: "Yes"
eTailor: "I think that we can come to an arrangement."
And why do you think retailer would care ? He sold his goods, got money, end of story, customs is a buyer issue. If you think that someone in USA would do a fsck over minuscule Australian sales to go through all hassle of dealing with tax office in foreign jurisdiction your name must be Malcolm Turnbull.
> And why do you think retailer would care ?
Some will and some won't. There are online retailers who market to Australia (including posting deals on sites such as ozbargain) and freight forwarders who care about reputation. Plus the business can keep the GST for up to 56 days.
Below Steve 129 provides an excellent example of how punitive the government will be, except in this case it is likely to be the courier who will have to act as an interface between the government and recipient. Buyers will soon learn about this and will prefer to buy from sellers who pre-pay the GST because it save them money. Businesses won't care because they receive a credit for GST payments.
"Businesses won't care because they receive a credit for GST payments."
You can make up whatever you want truth is there's no precedent in the whole world where retailer obliged to collects tax on behalf of other jurisdiction. And there's no way it can be enforced or verified, ever.
so the "Free Trade" treaties/sellouts this and previous excuses signed are not going to be affected by a $17 collection/pickup fee at point of near delivery ? ATO are not stupid, unlike the denizens of Pointy House on Hill and have stated the cost of collection is not worth it for items under $1K. As for the post offices, most wont even try outside of main cities due to lack of space and already tiny margins.
Another stuffup, probably designed to fail so the Liberals have something to use in a campaign in next years election. Unfortunately, most of us already feel shuffling desk chairs on circus Oz is as futile as the Titanic unless by some miracle some intelligent people get elected. No, Greenies don't count, despite a Green senator being very effective and reasonable. Take a bow Scott.
“The nation's now decided that limit should go for online purchases.”
No, the nation’s overlords have made that decision.
I doubt that any body casting their vote in the last election even imagined that the Gummint would cave in to the likes of Gerry Harvey who thinks the only way to convince the public to patronise his store is to make the rest of the world more expensive.
This is not good for the Australian public, and not good for the economy in the long term. Only when true competition is about being better rather than being cheaper will we improve our quality of life.
This measure reflects either the profound ignorance, or the utter cynicism, of the political classes. 10% GST will not make an iota of difference. The competitive advantage of AliExpress, BangGood, DX.com etc is FREE SHIPPING, not GST. That is what Australian retailers cannot compete with.
More likely the shipping is being subsidised by the Chinese government, and by a poorly negotiated reciprocal agreement between Australia Post and the Chinese. I can buy a 50c item on AliExpress that would cost $2 here, and still get free shipping. It probably costs Australia Post more than 50c to deliver it to my door.
You have to worry - a lot - when our "leaders" like Joe Hockey are too uninformed and too stupid to join the right dots together.
EVERY package we send to our family in the UK gets stopped at customs and import tax assessed even though we explicitly follow the rules, individually package and mark items and keep below the limits.
Customs NEVER let them through, as they should be legally required to do, but always try to charge more than the items are worth in tax and fees.
Every time my family needs to go down to the customs office and say 'Open it up and check it. We followed your rules so you can't charge tax"
It is disgusting bullying by the customs office as I am sure most people don't have the time/patience/will to go down there (during office hours) and prove they should not pay import duty.
I've just had a similar fight with Aust. customs. They wanted to charge me 5% duty on $2000AUD worth of goods from the USA that were meant to be duty fee under the FTA. I eventually won the dispute and only paid brokerage + GST.
But the fact that they tried it on anyway (when the nature of the goods and tarrif code clearly indicated the situation), is the bit that is annoying.
It _seems_ that that their SOP is 'charge unless we get caught out'.
Not looking forward to them being involved in collecting/processing the little stuff too.
(and I'm sure they're not chuffed about it either)
I buy goods from overseas not because they are 10% cheaper being GST free. I buy them because they are 50% to 90% cheaper!!
Once the government charges GST, these are business purchases so I get that 10% back anyway.
Once this scheme fails and its shown to cost more to collect the tax than what it nets, Gerry Harvey and his cronies will have to come up with a new complaint as to why Australian retailers can't compete.
I buy stuff from overseas because it is simply not available in Australia. I can't even buy lossless digital releases of Australian music unless I use a VPN to buy from an overseas retailer - there are simply no outlets here.
Also books - digital or paper - most of what I get is simply not available here.
I recently purchased two Samsung memory modules from China for ~$5 + $5 P&P. With GST levied that would have been $10.50.
Locally I could purchase one (no-name) module for $28, but since there was only one in stock useless for my purposes. Would the $0.50 GST impost make me purchase locally? You'd have to be a complete fucking moron to believe I'd pay $56 plus a stocking fee instead of $10.50. Yes, Mr Hardly Normal and our politicians are complete fucking morons!
There are only two minor issues with this plan which won't let it bring in as much money as they think. The first is now GST won't be collected as often on things over the $1000 limit as the processing system won't work properly.
The second reason is that any large group that has to send in a massive amount of GST will end up playing high speed automated foreign exchange currency games. I figure that will knock at least 5% off the AUD early some morning resulting in a massive unfixable currency problem.
So if I pay a sales tax overseas, this is counted against the 10% GST, right? Or, more likely, will the Oz government double-tax me for an item?
If I pay income tax overseas in a multitude of countries, I do not have to pay tax on that income in Australia - there are reciprocal tax practices in place. Ditto, if a company has already paid the tax on the dividend it is paying me, I don't have to pay tax on said dividend. But there seems to be no such provision in this taxation regime. Looks like OzGov is trying to double-dip to me.
Mr Hockey said "it will take a long time to get this right, if ever. We are going to have taxation officials travel around the world visiting companies asking them to register for GST purposes. There could be hundreds of them..."
He has no idea how much tax it will bring in, but it was certain to exceed the cost of collection because Australian officials would not be asked to open parcels to check whether tax had been paid.
Hockey's a moron.
I will import thousands of $2 packages from China over the course of a year, and I will let those packages sit around at my local post office for as long as possible before picking them up and paying the GST.
In terms of parcel holding real estate, my local post office will likely become mine alone.
If a few thousand of us do it, the postal and customs systems will self-destruct under the load.
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