This measure is estimated to add $300m to GST revenue over the next four years and will align GST treatment of low value goods sourced both domestically and internationally.
Currently, goods imported into Australia with a customs value that does not exceed $1,000 are not subject to GST. We understand that the $1,000 threshold will be removed altogether.
The new measure will require offshore vendors that have an Australian annual turnover of $75k or more to register for, collect and remit GST for supplies of low value goods to consumers in Australia.
This is in line with the model adopted for the proposed ‘Netflix Tax’, which will require offshore suppliers to register and account for GST on the supply of things other than goods and real property to Australian consumers.
The low value imported goods and the Netflix Tax measures are intended to apply to offshore vendors from 1 July 2017.
It will be critical for our international clients to ensure that they have appropriately assessed their requirement to register for and charge GST, and that their systems and processes are updated to ensure compliance with the new legislation.