GST On Overseas Online Purchases

[glend (Glen)]

It seems the Federal Government might be about to slap GST on overseas internet purchases under $1000. This is coming about thanks to the government being pushed into it by Netflix. Netflix does not have to charge GST because it is supplying from overseas, whereas any Australian business supplying the same service must charge GST - thereby creating an unfair advantage. As Netflix is so pervasive, and the market potential so large, the government looks to be using this as the justification for going ahead in the Budget next Tuesday.

Retailers will be happy, while shoppers will just have to cop it. Will this stop overseas internet shopping? How will this be implemented on overseas charging through Paypal, etc. Overseas retailers might have to direct the payment through Payal Australia to collect the GST. And BTW, does Paypal Australia pay tax here?

So I'll be doing some overseas shopping today for some small astro items I was thinking of getting - which are either unavailable here or twice the price.

What do you think of this development?

[Amaranthus (Barry)]

Will probably cost the Government more in the bureaucratic architecture required to implement this than they'll get back in revenue. It's clearly just being done to 'level the playing field' for Australian business. But there are arguments on both sides -- cheaper from overseas, but more risk.

[LewisM]

Unless it is a niche item just not available here, I have found that if you do your homework, local is cheaper than importing.

I haven't bought OS except for niche "odd" items in a long time.

[Eratosthenes (Peter)]

pity large corporations dont pay much tax in this country.

in the last financial year, the ATO reported that 40% of Australias largest corporations didnt pay any tax at all. The remaining 60% of corporations paid on average less than 18%.

The Ebay market alone is in excess of several billion dollars per year. A 10% GST tax is a very substantial amount of revenue for the Government.

By the way, our so called Australian Mining and Energy industry is 83% foreign owned (mainly in the hands of US corporations who control about 55% of this sector). This industry pays very little tax on revenue/profits in this country (and only employs about 3% of Australians which is less than the workforce in the Queensland tourism industry)

Naughty BHP for example is being dragged by the government to the Federal court to recoup lost tax revenue due to a very under handed tax avoidance scheme that BHP has been running out of Singapore.

Apparently BHP (Australia) would on sell resources well below market price to an intermediate set up in Singapore, who would then on sell the resource to the final destination at global market prices. All this, to avoid paying tax in Australia.

And remember, the mining and energy sectors in Australia are subsidised by the Australian Tax payer to the tune of 12 billion dollars per year.

We seem to do things in a very smart way in this country.

[The_bluester (Paul)]

By my understanding the GST was not previously charged on under $1K purchases from overseas as it costs more than $1 for every $1 of GST collected. The only ones who would be happy would be Gerry Harvy and his cohort when we all pay GST on everything that comes in, where on many items coming in it is still vastly cheaper to import as needed and the tax take is smaller than the cost to collect it so we also pay the difference in our income tax (It has to come from somewhere)

For much of the stuff I have bought online the price difference between local and overseas supply (Usually US) is so stark that I will still do it.

[glend (Glen)]

Originally Posted by LewisM

Unless it is a niche item just not available here, I have found that if you do your homework, local is cheaper than importing.

I haven't bought OS except for niche "odd" items in a long time.

Just what is 'niche'? I buy a lot from overseas and always save money ( on items where cost is below $1000 GST threshold). Most ATM equipmnt is cheaper, and you can't buy objectives here. EPs are cheaper, the Televue sales in the US save hundreds on EPs that cost almost nothing to ship. I bought an ED80 APO Triplet recently for less than $800 to my door, try that here.
As you point out that you haven't bought OS in a long time, how do you know. Sure it was better when the AUD was at parity with the USD but bargains are always there if you monitor the frequent sales.

[LewisM]

How do I know? Because I compare when I am going to buy.

Like the TnT for the Porta II - available locally here cheaper delivered than OptCorp's price even before you do a currency conversion (and then you need to add postage).

Tak accessory and most OTA prices here are cheaper than USA or equal or better than Hong Kong.

[Renato1 (Renato)]

It'll be interesting to see if this actually happens. Former treasurer Peter Costello said at the time that it wasn't worth the effort.

Even if it did come in, would it really matter. When i wanted a wire to connect an MP3 player to a stereo, the cheapest I could find was $14. I just ordered it from China and got two for a dollar.

I'd hate paying the 10 cents GST, but I'd hate paying Australian retail prices more.
Cheers,
Renato

[astroron (Ron)]

Originally Posted by Renato1

It'll be interesting to see if this actually happens. Former treasurer Peter Costello said at the time that it wasn't worth the effort.

Even if it did come in, would it really matter. When i wanted a wire to connect an MP3 player to a stereo, the cheapest I could find was $14. I just ordered it from China and got two for a dollar.

I'd hate paying the 10 cents GST, but I'd hate paying Australian retail prices more.
Cheers,
Renato

It will cost more to recoup the tax than what they will make.
Cheers

[Camelopardalis (Dunk)]

Given the limited supply options in our hobby, this is disastrous IMO. That's even worse than the UK (~$30 "free"). No doubt the cost of the paper pushing (even though it should all be computerised...) will be passed on to the consumer, as in the UK, at a rate of $20-30 an item...

[Renato1 (Renato)]

Originally Posted by Eratosthenes

pity large corporations dont pay much tax in this country.

in the last financial year, the ATO reported that 40% of Australias largest corporations didnt pay any tax at all. The remaining 60% of corporations paid on average less than 18%.

The Ebay market alone is in excess of several billion dollars per year. A 10% GST tax is a very substantial amount of revenue for the Government.

By the way, our so called Australian Mining and Energy industry is 83% foreign owned (mainly in the hands of US corporations who control about 55% of this sector). This industry pays very little tax on revenue/profits in this country (and only employs about 3% of Australians which is less than the workforce in the Queensland tourism industry)

Naughty BHP for example is being dragged by the government to the Federal court to recoup lost tax revenue due to a very under handed tax avoidance scheme that BHP has been running out of Singapore.

Apparently BHP (Australia) would on sell resources well below market price to an intermediate set up in Singapore, who would then on sell the resource to the final destination at global market prices. All this, to avoid paying tax in Australia.

And remember, the mining and energy sectors in Australia are subsidised by the Australian Tax payer to the tune of 12 billion dollars per year.

We seem to do things in a very smart way in this country.

Most of this is the line being peddled by Fairfax, the ABC and Crikey.

Most of the tax stuff has been attacked and demonstrated to be wrong by Terry McCrann in his columns.

And, as he points out, Fairfax's main financial paper, the Australian Financial Review is probably very embarrassed by the tripe being put out by its sister papers. The AFR isn't publishing the "We are being ripped off by companies" nonsense, because they know it's nonsense.

The notion that the most feared organisation in the country - the ATO - just lets companies pay little of no tax, is ridiculous.

As Treasurer Hockey recently said, the companies are paying 30cents tax in the dollar on every single dollar that they are required to do so.
McCrann pointed out that the conspiracy articles were
a. confusing accrual accounting profits in the company reports, with the actual profits they had to pay tax on,
b. that they were confusing Trusts with companies, where the trusts pay no company tax, but the trust owners were paying tax at the full personal rate,
c. that they were confusing overseas earnings with local earnings, where, for example their analysis suggested that Newscorp should be paying Australian company tax on all its profits, when in fact most of that profit is made overseas, where they pay tax in the overseas countries.
Regards,
Renato

[clive milne]

Originally Posted by Renato1

As Treasurer Hockey recently said, the companies are paying 30cents tax in the dollar on every single dollar that they are required to do so.

<checks birth certificate>
Nope, wasn't born yesterday.

[jayconnor (Jay)]

I buy most of my shoes and clothes from the states and if me and a couple mates do it at the same time shipping costs are not a issue! It's so much cheaper

[Renato1 (Renato)]

Originally Posted by astroron

It will cost more to recoup the tax than what they will make.
Cheers

Which reminds me of Italy, where they levy their 20% tax on most everything that comes into the country from outside the EU. Most Ebay sellers outside the EU won't sell there anymore because it takes four months for a parcel to finally get through the system to the purchaser.

Curiously though, if you are over there and send a big parcel by surface mail to Australia, it gets here in a week and a half to two weeks.
Cheers,
Renato

[pmrid (Peter)]

My guess is that this is either a deliberate leak of disinformation in advance of the budget or the fairly predictable knee-jerk reaction of the masses to an upcoming Budget - or both. The government would be quite happy for us all to run around moaning that the sky is falling so they can make us all feel a bit better when the Budget turns out to impose a lesser or no impost at all. If you want someone to feel good about being kicked in the backside, let them believe they're going to be fed to a crocodile for a while.

Jo Bjelke-Peterson (and I think Clive palmer as well) were great at "feeding the chooks " as the saying goes - let the great unwashed get all excited about something that will distract them from the reality they will face.

Peter

[AndrewJ]

Are they talking ALL internet purchases or just some of the more well known ones who provide the goods via downloads. I thought i heard that they were going to start by targeting companies like Apple, Netflix, Amazon etc and get them the add the GST to all online downloads to Oz from OS, as that can be easily automated.
( The discussion was more how they would be able to block use of VPNs to get around geoblocking etc and a benefit of that was how that would enable the tax collection. )
Andrew

[JB80 (Jarrod)]

Originally Posted by Renato1

Which reminds me of Italy, where they levy their 20% tax on most everything that comes into the country from outside the EU. Most Ebay sellers outside the EU won't sell there anymore because it takes four months for a parcel to finally get through the system to the purchaser.

Curiously though, if you are over there and send a big parcel by surface mail to Australia, it gets here in a week and a half to two weeks.
Cheers,
Renato

It's an EU wide thing, you pay VAT on anything entering the EU from outside and are normally hit with customs too. Each country may have a slightly different way of dealing with it but order from the US or anywhere and you will normally get that 20% VAT hit.
It certainly stops me from ordering items that are unavailable locally(in the EU).

[Eratosthenes (Peter)]

Originally Posted by Renato1

Most of this is the line being peddled by Fairfax, the ABC and Crikey.

Most of the tax stuff has been attacked and demonstrated to be wrong by Terry McCrann in his columns.

And, as he points out, Fairfax's main financial paper, the Australian Financial Review is probably very embarrassed by the tripe being put out by its sister papers. The AFR isn't publishing the "We are being ripped off by companies" nonsense, because they know it's nonsense.

The notion that the most feared organisation in the country - the ATO - just lets companies pay little of no tax, is ridiculous.

As Treasurer Hockey recently said, the companies are paying 30cents tax in the dollar on every single dollar that they are required to do so.
McCrann pointed out that the conspiracy articles were
a. confusing accrual accounting profits in the company reports, with the actual profits they had to pay tax on,
b. that they were confusing Trusts with companies, where the trusts pay no company tax, but the trust owners were paying tax at the full personal rate,
c. that they were confusing overseas earnings with local earnings, where, for example their analysis suggested that Newscorp should be paying Australian company tax on all its profits, when in fact most of that profit is made overseas, where they pay tax in the overseas countries.
Regards,
Renato

Murdoch's newscorp recently received a nice refund from the ATO to the tune of about 880 million dollars soon after the Abbott government was elected in 2013.

Hockey made no comment on the refund, and the government decided not to challenge the Federal Court ruling

Terry McCrann works for Murdoch doesnt he? Like Andrew Bolt, a world authority

Almost two-thirds of Australia’s top 100 companies listed on the stock exchange have subsidiaries in tax havens or low-tax jurisdictions, a new report shows.
Thirteen of the top 20 companies, including two of the big four banks, have entities in well-known tax havens such as the Cayman Islands, Luxembourg, the British Virgin Islands and Bermuda.


http://www.smh.com.au/business/top-f...524-2k719.html

[Renato1 (Renato)]

Originally Posted by JB80

It's an EU wide thing, you pay VAT on anything entering the EU from outside and are normally hit with customs too. Each country may have a slightly different way of dealing with it but order from the US or anywhere and you will normally get that 20% VAT hit.
It certainly stops me from ordering items that are unavailable locally(in the EU).

On Ebay, the only EU country that Asian sellers say they won't sell to because of the amount of time to clear customs, is Italy. I suspect Italy does things very differently from other EU countries.
Regards,
Renato

[glend (Glen)]

I have purchased from UK suppliers and been able to get the VAT removed. Just make sure they understand at time of order that this is an export outside UK and EU. They have to process it to exempt and some can't be bothered or do it and pocket the VAT for themselves and don't remit to the government. This kills EU and UK export trade.