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Australia Pushes Ahead With GST On Low Value Imports

by Mary Swire, Tax-News.com, Hong Kong

04 November 2016


The Australian Government has published draft legislation that, if passed, will require certain overseas suppliers to account for goods and services tax (GST) on sales of low value goods.

Currently, "low value goods" – i.e. goods with a customs value of AUD1,000 or less – are generally not subject to GST when imported directly into Australia by the recipient. The Government has proposed that GST will be extended to low value goods imported by consumers in Australia from July 1, 2017.

Under the plans, GST will be collected through suppliers, electronic distribution platforms, or goods forwarders under either the existing registration system or a simplified system. GST will be applied on each taxable low value item and any shipping or insurance connected with that purchase.

Only those registered, or required to be registered, for GST will be affected. The GST registration turnover threshold is AUD75,000. The GST rate is 10 percent.

The Government will review the arrangements after two years "to ensure they are operating as intended and to take account of any international developments."

According to Treasurer Scott Morrison, "The intention is that low value goods imported by consumers in Australia will face equivalent GST treatment to goods that are sourced domestically."

A consultation on the draft legislation will remain open until December 2.

TAGS: compliance | tax | value added tax (VAT) | commerce | VAT cross-border transactions | goods and services tax (GST) | Australia | tax thresholds | ministry of finance | e-commerce | legislation | tax reform | services | VAT compliance matters | BEPS

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