Australia has postponed the removal of the low value threshold for imported goods, currently AUS $1,000, such that all imports would be subject to GST from 1 July 2017 to 1 July 2018.
It was intended that a vendor collection model would be implemented, such that overseas suppliers and online marketplaces i.e. Amazon and eBay with an Australian GST turnover of $75,000 or more would account for GST on sales of low value goods to consumers in Australia.
The extension was agreed as the practicality of the proposed bill was being examined due to concerns raised by various parties, including a number of electronic distributions platforms and The Australian Tax Institute, about the proposed collection method.
GST on imported services and digital products
As previously reported, from 1 July 2017, GST will apply to imported services and digital products by Australian consumers.
To establish if the supply is made to an Australian consumer an ATO ruling details what evidence is required and steps a business should take in collecting that evidence. Under the ruling, to qualify as an Australian consumer:
- An entity must be an Australian resident for income tax purposes
- They must satisfy the consumer element by either not being registered for GST or if registered, the supply cannot have been purchased solely or partly for the enterprise
Transitional rules are in place for periodic or progressive supplies that commence before 1 July 2017 and continue after 1 July 2017. Where a business makes a supply before 1 July 2017 and the period of the supply extends beyond this date, the portion after 1 July 2017 may be subject to GST with the GST payable in the first tax period after 1 July 2017.