# New Australian law applying GST to imported digital products and services



## Instyle (Oct 18, 2014)

Australia has introduced a new law applying the Australian Goods and Services Tax (GST) to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales from 1 July 2017.

The new law applies very broadly to sales of anything except non-digital goods or real property.

If you sell through an electronic distribution platform, for example an app store, the platform operator is responsible for registering, reporting and paying the GST.

https://www.ato.gov.au/Business/Int...T-to-imported-digital-products-and-services/#


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## WollyDriver (Apr 8, 2016)

This sounds like one of the stupidest things ever.... I really wonder whether anyone with a brain has actually stopped to think about this.....


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## Instyle (Oct 18, 2014)

WollyDriver said:


> This sounds like one of the stupidest things ever.... I really wonder whether anyone with a brain has actually stopped to think about this.....


Name your concerns?

Theres going to be pros and cons, but one aspect is this might stop Australian companies from leaving our shores just to better themselves tax-wise. As for international companies already doing business in Australia, do you genuinely think Apple will cease itunes or similar companies just because they'll have to pay/add GST? They'll either deal with it (like most Uber drivers do when Uber cuts rates) or they'll add the 10% and Australia will benefit from the otherwise missed revenue.


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## WollyDriver (Apr 8, 2016)

Instyle said:


> Name your concerns?
> 
> Theres going to be pros and cons, but one aspect is this might stop Australian companies from leaving our shores just to better themselves tax-wise. As for international companies already doing business in Australia, do you genuinely think Apple will cease itunes or similar companies just because they'll have to pay/add GST? They'll either deal with it (like most Uber drivers do when Uber cuts rates) or they'll add the 10% and Australia will benefit from the otherwise missed revenue.


Sure, Apple/Google will just add 10% GST to the charges, and remit that to the ATO, however will all the other (thousands or more) websites do that? Let's take the most common example, website ABC based in Europe or America sells software foo for $200, they are a registered company/etc in their country of operation, and they follow all laws/etc for their own country. Who is going to *force* them (or what penalty/reason do they have to comply) with the requirement to add 10% to their software if the purchaser uses an australian credit card, or identifies in some other way as being australian? How will doing this impact their local income/tax collection/calculations? 
What will the costs to the business be to remit these funds to the ATO?
Whose currency is this GST calculated in?
What about the currency value variations during the time between the order is placed/paid and the GST is remitted to the ATO?
What about other additional costs to the company for increasing complexity of the website as well as increased accounting costs, banking costs, etc?
Sure, we could "ignore" many of these websites which might generate $20 GST every 2 or 3 months, but does the law include some exclusion based on turnover (of australian dollar sales)?
PS, as a registered GST company, if I pay GST to anyone (overseas or local) then I will claim it back, so there is no difference to me. It will only make any difference to "consumers", other than apple/google is anyone else going to be big enough to make a difference?
Will this apply to uber? (probably not, but if this law could be written correctly, then it might make uber collect and pay the GST instead of us drivers (see, this might still be on-topic...)


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## Instyle (Oct 18, 2014)

I really don't see too much negative for Australia, Australian Businesses or Consumers.

I understand there'll be lots online stores that'll probably fall through the cracks, though I'd have a little more faith in the ATO super computers that can track funds into and out of Australia. It's my opinion that the main reason for such laws is to catch the well known large companies that commonly do business in Australia by supplying goods or services.

Uber would fall within this new GST law whereby they supply a service, a lead generation service, with the drivers as Uber's customers. Uber would turnover more than $75k annual in Australia.


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## WollyDriver (Apr 8, 2016)

Instyle said:


> I really don't see too much negative for Australia, Australian Businesses or Consumers.
> 
> I understand there'll be lots online stores that'll probably fall through the cracks, though I'd have a little more faith in the ATO super computers that can track funds into and out of Australia. It's my opinion that the main reason for such laws is to catch the well known large companies that commonly do business in Australia by supplying goods or services.
> 
> Uber would fall within this new GST law whereby they supply a service, a lead generation service, with the drivers as Uber's customers. Uber would turnover more than $75k annual in Australia.


Since uber only supply services to businesses registered for gst (ie us partners) this won't have any impact for Australia (net income will be nil) or us (they will just add 10% to the existing 20% instead, so increasing their "share", you will still need to pay the 1/11 th of the pax fare).
This only has a potential positive for a foreign company selling to Australian consumers.... I noticed apple already charges me inc gst for monthly icloud storage.... which i simply claim back again.


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## UberDriverAU (Nov 4, 2015)

Instyle said:


> Uber would fall within this new GST law whereby they supply a service, a lead generation service, with the drivers as Uber's customers. Uber would turnover more than $75k annual in Australia.


I think just about all of us see through the facade that Uber is a mere "lead generator" or "payment facilitator". The vast majority of their "leads" turn into sales. Very few sales channels would see such a high conversion rate.


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## WollyDriver (Apr 8, 2016)

UberDriverAU said:


> I think just about all of us see through the facade that Uber is a mere "lead generator" or "payment facilitator". The vast majority of their "leads" turn into sales. Very few sales channels would see such a high conversion rate.


Not sure i get a number of cancellations every time lol
But yes i agree its not a lead generation its much more than that.


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## UberDriverAU (Nov 4, 2015)

WollyDriver said:


> Not sure i get a number of cancellations every time lol
> But yes i agree its not a lead generation its much more than that.


Leads don't get cancelled, sales get cancelled. When you press on "REQUEST uberX NOW", you're actually placing an order with the expectation that someone will shortly be on their way to deliver you a service for a fee. Getting a Fare Estimate is the closest thing that Uber does to obtaining a lead, but it's something that drivers never see, so they're not actually providing any leads to drivers at all.


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