Written by Geoff Mann, Partner & Elke Bremner, Senior Associate – Ashurst*
Stock up on your Nike running shoes, your Kate Spade handbags and your Stephen King novels now as, come 1 July 2018, you may be paying an additional 10%.
Where the provisions apply, it will
be the supplier (or deemed supplier) who will be liable to remit GST to the
Australian Taxation Office (ATO). Operators of electronic distribution
platforms (EDPs), such as eBay, and re-deliverers can also be deemed to be the
supplier. To address the potential for double taxation, where the supplier (or
deemed supplier) reasonably believes that GST will apply to the supply under
the current A$1,000 taxable importation rules, no GST will be payable by them.
The Government has estimated that the new provisions will
raise approximately A$300m in revenue over the next four years.[1] However, there are a number
of question marks over how the ATO will be able to enforce compliance by
non-resident online retailers with no physical presence in Australia. What is clear, however,
is that the implementation of the new measure is causing significant
difficulties and practical complexities among the big foreign players in the
market. eBay has even threatened to cease engaging with Australian customers if
the measures become law.[2]
A deferred start date of
1 July 2018 has been agreed to allow non-resident online retailers more time to
prepare for the changes. The
Productivity Commission has also been asked to review the proposed vendor
collection model to ensure that this really is the most efficient way of
collecting the GST.[3] The Productivity Commission reported its findings to the Government on 31 October 2017[4].
*This post is sponsored content from LexisNexis, and written by Geoff Mann, Partner, and Elke Bremner, Senior Associate, Ashurst.