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Nov. 8 — The Australian Taxation Office plans to rely heavily on companies such as EBay, Amazon and United Parcel Service to collect and remit goods and services tax on behalf of suppliers of cheap imported goods.
The Australian government released draft legislation Nov. 4 that would end existing exemption arrangements and impose GST on low-value imported goods.
Beginning July 1, 2017, the law would require overseas suppliers to collect and remit GST on sales of low-value goods to Australian consumers, a move the government estimates will reap an extra A$70 million ($53.7 million) in the 2017-18 financial year, rising to A$130 million by 2019-20.
From the same date, GST will apply to digital products supplied from overseas as a result of legislation already in place.
The draft legislation defines all goods worth A$1,000 or less as low-value, although the requirements won’t apply to suppliers with turnover from Australian consumers of less than A$75,000.
The draft bill would allow overseas suppliers to register with the Australian Taxation Office (ATO) and collect and remit the GST directly themselves.
It also would require electronic distribution platforms (EDPs) to remit it on behalf of those using their sites unless they have alternative arrangements in place with particular suppliers.
Freight forwarding agents similarly would have to register, collect and remit on behalf of suppliers using their service unless other arrangements are in place.
The draft bill wouldn’t impose GST collection obligations on freight companies.
Craig Whatman, Melbourne-based executive director with tax advisers Pitcher Partners, told Bloomberg BNA Nov. 7 that the draft bill is “a reasonably complicated piece of legislation.”
As with Australia’s so-called Netflix tax on digital products, the draft bill and the associated implementation strategy still under development really aim to “capture the big boys,” he told Bloomberg BNA. This approach is “sensible from a cost perspective,” he said, adding, “How much money does the government want to spend chasing entities overseas that have no presence here?”
Tony Windle, Brisbane-based national head of indirect tax at Grant Thornton, said the legislation would help make the GST relevant “for the sort of economy we have got now.”
Windle, who is a member of the Institute of Chartered Accountants GST Committee, said he expects a number of different collection and remittance models to emerge in response to the legislation.
The ATO would want entities such as Amazon and EBay to collect and remit because it would make things easier from a compliance perspective, he agreed.
That has the potential to involve EDPs charging “a fee for service,” he said. However, Windle added that some suppliers would want to go it alone and handle the new obligations directly.
“A supplier that uses EBay but also has other multi-channel distributions, may not want to opt-in to the EDP rules. They might want to register themselves and do their own thing,” he said. “So I think we are going to see a number of different models emerge.”
Windle added that the simplified GST registration system that will underpin the new obligations won’t be available until April 2017, a few months before the new obligations are supposed to start.
Comments on the draft bill are due Dec. 2.
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Treasury Laws Amendment (2017 Measures No. 1) Bill 2017: Low Value Imported Goods and related materials are at http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2016/Applying-GST-to-low-value-goods-imported-by-consumers
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