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Australia withdraws import GST exemption; tax due at checkout by foreign sellers and marketplaces

On 1 July 2018, Australia ended the import Goods and Services Tax exemption for small-value parcels. Import GST will instead have to be charged in the online checkout for any imported sales to consumers not exceeding AUD 1,000. For foreign sellers or facilitating marketplaces, this will mean they have to registered with the Australian Tax Office (ATO) under the new simplified returns process if they exceed the registration threshold of AUD 75,000 per annum.

If you need to prepare and submit Australian GST returns, VAT Calc’s VAT Filer can correctly complete any country filings with verified VAT or GST transactional data from our VAT Calculator or VAT Auditor integrated services.

Electronic distribution platform – marketplace liabilities

In addition to non-residents being liable for GST, marketplaces or ‘electronic distribution platforms’ (EDP) may also be responsible for collecting the GST instead of the seller. If a marketplace allows merchants to make sales of low value imported goods available to customers, and the service is delivered by electronic communication (for example, an online marketplace). If customers buy low value imported goods from merchants through the website, it is an EDP.

E-commerce foreign GST registrations

Non-resident e-commerce sellers or EDPs have a number of choices when registering for Australian GST:

  1. Standard GST registration with right to deduct GST. This firstly requires an Australian Business Number application
  2. Simplified GST registration with limited requirements for reporting, but no right to deduct any Australian GST incurred. This requires firstly an AUSid, special identification number application and then GST registration.
  3. Standard claim

The reforms were initially planned for 1 July 2017 but were postponed a year following lobbying by the major marketplaces.

Australia GST on foreign digital services was introduced on 1 July 2017. New Zealand GST on low-value goods will reform on 1 December 2019. The EU e-commerce VAT package will implement similar reforms in the 27-state bloc from 1 July 2021.

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