GST already in the shopping cart for Aussie Amazon orders

24 November 2017

Today’s widely anticipated soft launch of e-commerce giant Amazon has brought the spotlight back on GST. Consumers shopping with global online retailers currently don’t have to pay GST on goods under $1,000, however from today Amazon will now become subject to GST as they are Australian-based.

The changes to GST are in response to Amazon and other global e-commerce giants including eBay and Alibaba coming to Australia and part of a trend of taxes in response to the disruptive influence of online goods and services. It follows the ‘Netflix Tax’ which was passed in March 2017 and applies to all intangible goods such as software, as well as professional services and consulting.

Chris Vittas, Indirect Tax Partner, BDO Melbourne commented “The perceived preferential treatment of online shopping has been a contentious issue for a while, with the Australian retail sector lobbying hard to ensure that where a business is benefiting from sales to Australian consumers, the purchase is taxed in the same way as local retailers. According to small business ombudsman, Kate Carnell, the arrival of Amazon offers both threats and opportunities for small business. Amazon offers a potentially powerful platform and could help cut the cost of postage and transport but small businesses planning to build up stock to meet the expected surge in sales should read contracts carefully.”

Fady Abi Abdallah, Indirect Tax Partner, BDO Sydney added “While the changes don’t take effect until 1 July 2018, businesses importing goods into Australia will need to begin reviewing their positions now and to check whether supply chains are affected and determine which entities in the supply chain are actually liable for GST. Australian businesses that purchase low value goods from overseas should check to make sure that overseas suppliers are not imposing GST on supplies of these goods unnecessarily.”