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Australian Goods And Services Tax Guidance For Offshore Suppliers

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

02 November 2016


The Australian Tax Office (ATO) has updated its guidance for those non-resident businesses that make supplies of goods, services, or digital products to consumers or GST-registered businesses in Australia, with a couple of changes due to occur next year and a change last month.

Since October 1, 2016, certain transactions between overseas businesses and Australian businesses are no longer subject to goods and services tax. It is intended that non-resident businesses should no longer be drawn unnecessarily into Australia's GST system, reducing their overall compliance costs. The law companion guide LCG 2016/1 "GST and carrying on an enterprise in the indirect tax zone (Australia)" explains the application of this change.

From July 1, 2017, goods and services tax will apply to cross-border supplies of digital products and other services imported by Australian consumers. This includes digital products such as streaming or downloading of movies, music, apps, games, and e-books, as well as services such as architectural or legal services.

The change applies to those entities that meet the registration turnover threshold of AUD75,000 (USD57,575).

In addition, from July 1, 2017, non-resident suppliers who sell low value goods to any consumer based in Australia meet the registration turnover threshold of AUD75,000 will need to: register for the Australian GST; and report and pay GST to the ATO.

This includes all taxable goods that have a value equal to or less than AUD1,000. The removal of such exemptions for low-value consignments was proposed in the OECD's Action 1 report on base erosion and profit shifting (BEPS) and the digital economy. Law for this measure is yet to be enacted.

TAGS: compliance | tax | business | value added tax (VAT) | legal services | law | goods and services tax (GST) | Australia | services | Tax | BEPS

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