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Australia Consultation on Applying GST to Low Value Goods Imported by Consumers — Orbitax Tax News & Alerts

The Australian government has released draft legislation that, from 1 July 2017, will require overseas vendors, electronic distribution platforms, and goods forwarders to account for GST on sales of low value goods to consumers in Australia. Similar legislation for GST on cross border digital supplies has already been adopted ({News-2016-05-12/A/2- previous coverage}).

The changes include:

  • Making supplies of goods valued at AUD 1,000 or less at the time of supply connected with Australia (indirect tax zone - ITZ) if the goods are, broadly, purchased by consumers and are brought to the ITZ with the assistance of the supplier;
  • Treating the operators of electronic distribution platforms as the suppliers of low value goods if the goods are purchased by consumers and brought to the ITZ through the platform;
  • Allowing non-resident suppliers of low value goods that become connected with the ITZ because of these amendments to elect to be limited registration entities; and;
  • Preventing double taxation by making the import of goods non-taxable importations if the supply of the goods is a taxable supply as a result of these amendments.

As a result of the changes, an overseas supplier with turnover for GST purposes exceeding the AUD 75,000 registration threshold will be required to register and remit GST on its supplies.

Click the following link for the consultation page, which includes the draft legislation, the explanatory memorandum, and a Q&A. Submissions are due by 2 December 2016.