The Australian Goods and Services Tax (GST) landscape for cross-border transactions is due for a radical change with the introduction of the Tax and Superannuation Laws Amendment bill 2016 into parliament.
Australia will soon be joining many other countries in addressing the integrity of their tax systems in an endeavor to tax private consumption of digital products and services purchased from nonresident suppliers.
The Bill contains measures which seek to extend GST to the business to consumer (B2C) supply of digital products, services and other intangibles into Australia from 1 July 2017. These supplies largely escape GST under current law. In some instances principally with regard to digital products, the GST compliance burden could fall on an intermediary operating an “electronic distribution platform” through which those digital products are distributed to end consumers in Australia.
Currently, goods imported into Australia with a value of less than AU$1,000 are not subject to GST or customs duty. It is intended that the low-value threshold for GST purposes will be reduced to nil effective 1 July 2017, although no legislation has been introduced to effect this change.