Budget 2016: Government cracks down on GST-free online purchases

New measure would force Amazon-style online retailers with a $75k+ turnover in Australia to collect GST

The government will extend the GST to cover all overseas purchases in a measure that will capture sales from large online retailers such as Amazon.com.

Previously, sub-$1000 online purchases were not liable for GST.

“The intent of this measure is that low value goods imported by consumers will face the same tax regime as goods that are sourced domestically,” budget papers state.

The measure is expected to bring in an additional $300 million over the forward estimates period.

Overseas retailers with turnover in Australia of $75,000+ will be required to collect GST under the changes mooted by the government. The measure will be reviewed after two years.

The new arrangements, which require agreement from the states and territories as well as federal legislation, will kick in on 1 July 2017.

Former treasurer Joe Hockey announced in August last year that agreement on the changes had been reached at a Council on Federal Financial Relations Tax Reform Workshop.

The government has earmarked $13.8 million over four years in funding for the Australian Taxation Office to implement the measure.

As part of last year’s budget the government announced a so-called ‘Netflix’ tax designed to extend the GST to digital goods and services purchased by Australians.

The Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016 is currently before the Senate.

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