Australia may delay Jul 2017 foreign GST e-commerce overhaul
Australia has indicated that it may delay until July 2018 the requirement for non-resident e-commerce companies to charge 10% GST on the sales of goods to consumers. On the back of a Senate hearing last week, the Labor opposition party has claimed that the lack of preparedness and impact assessment means a 1-year postponement is required.
10% GST on non-resident e-retailers
Australia had planned to withdraw the AUS$1,500 GST free threshold on sales by overseas e-commerce companies. Instead, from 1 July 2017, Australia had planned to require foreign online retailers with annual sales above AUS$75,000 per annum to GST register and charge their Australian consumers with local sales tax.
However, the large online platforms, including eBay Amazon and Alibaba, claimed that most small retailers would not be ready, and very little extra tax would be collected. A number of the platforms, including eBay, had threatened to geo-block Australian consumers if the new requirements were introduced without further consultation. Amazon, which is likely to build out distribution centres in Australia is less impacted by the proposals.
A senate committee has this week proposed that the proposals be delayed until at least 1 July 2018. The head of the Australian Treasury’s individuals and indirect tax division, told senators the government had chosen the “vendor model” without subjecting it to a regulation impact statement.
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