"New Internet Tax" Topic

There's a new nasty tax on the way that may stop, or severely interfere with, Australians buying miniatures, and anything else, from overseas see ato.gov.au/Business/International-tax-for-busine…. I thought this would go away but I saw a news story this morning (specifically about Amazon) which clearly indicated it's coming in next month.

The only possible saving grace is that there is a registration threshold of AUS$75,000 so hopefully most miniature companies don't sell that amount of goods to Australia. If they do they will have to register, go through a lot of paperwork (including currency conversion of the value of the goods) and then collect the tax and pay it to the Australian Government.

So, if you're buying games from an operator who is likely to sell more than AUS$75,000 worth of goods to Australia, buy up this month before you're slugged an extra 10% on your purchase. [I would have thought that the high postage costs were enough of a disincentive to already make us carefully consider purchases, even though many items can not easily be purchased here in Australia.]

The announcement by Amazon is, I suspect, just another attempt by Amazon to scrape a few cents from all their 'partners' for access to the Australian market. Amazon has had the provision to collect Australian (or anywhere) GST/VAT for more than a year in their checkout, along with automatic local currency shopping (which they randomly turn on and off).

Their 'Amazon Australia' is a farce, mainly populated by the usual bunch of scammers from Asia with fake .au email addresses – I've tried ordering some items from 'Australian' vendors on Amazon.au and all the items shipped from a certain country between Vietnam and North Korea. The books and such that are offered are the same stuff you find in dump bins at discount stores, just full price, plus shipping.

Legally the GST legislation is likely to prove unenforceable, the small companies are not registered in Australia and have no assets here. If they were to be held enforceable by non-Australian courts, the ramifications for International trade are enormous – much of the EU for instance has NO minimum threshold for companies to pay VAT, so just about every company in the world would have to register in the EU and submit VAT returns if they have any dealings with the EU rather than having the purchaser pay locally.

Quamma,

The sky isn't falling … maybe (maybe not) this will help some Australian retailers stay in business.

Have a great day, Frank

This has been in force in the EU for over 10 years. In the UK it is called distance selling and any company selling goods in excess of UK's VAT turnover limit is required to register for VAT and charge it on sales to UK customers. The aim is to protect home traders from foreign competition.

We had this discussion a while back when it was first mooted. From my recollection most small retailers either did not have the turnover, or would not comply as ATO has no jurisdiction overseas.
I personally disagree with it, but seeing as I got DHd last time for talking about it ( apparently taxation = politics) I shall say no more.

Cheers
Jon

This has been in force in the EU for over 10 years. In the UK it is called distance selling and any company selling goods in excess of UK's VAT turnover limit is required to register for VAT and charge it on sales to UK customers. The aim is to protect home traders from foreign competition.

I think your understanding is somewhat off. The UK VAT threshold applies to any company trading within the UK whose turnover exceeds it, regardless of how they trade and is nothing to do with the UK distance selling regulations.

Which are covered here … link

Which are absolutely nothing to do with applying taxes to imported goods but obligations as a "distance seller" within the UK.

This has been in force in the EU for over 10 years. In the UK it is called distance selling and any company selling goods in excess of UK's VAT turnover limit is required to register for VAT and charge it on sales to UK customers. The aim is to protect home traders from foreign competition.

I think your understanding is somewhat off. The UK VAT threshold applies to any company trading within the UK whose turnover exceeds it, regardless of how they trade and is nothing to do with the UK distance selling regulations.

Which are covered here … link

Which are absolutely nothing to do with applying taxes to imported goods but obligations as a "distant seller" within the UK.

I have no sympathy for Amazon (and haven't ordered anything from them for many years.
The post was simply to advise people because although it was originally going to come into effect a year or so ago it kept being delayed: I suspect because (except for very large companies) it would very difficult (and expensive) to enforce. I doubt many, if any, overseas figure companies will meet the threshold for business in Australia.

However, it may impact on other related areas: a couple of boardgame producers (I'm thinking GMT where I have preordered games for a large discount to offset the heavy postage costs). This avoids a long wait of many months after release and the bigger price to buy from an Australian shop (assuming they order it in). Also, books: I've ordered a lot from the Book Depository which is based in the U.K. (yet strangely every package I receive from them originates from Australia).

PaddySinclair. As a VAT inspector for over 20 years and a tutor for HM Customs & Excise (as was) in VAT law I do know what I am talking about. Distance selling was an EU amendment to VAT legislation which changed the location of the supplier to the country of the buyer on certain goods and services. It expanded on the existing rules which were for supplies between EU countries where the customer was not VAT registered.

I thought to new law applies only to companies making more than 70,000 per year