Posted Under: Accounting and Taxation Posted On 10/11/2015
In August this year, the Federal and State Treasurers agreed to scrap the low-value GST-free threshold on online purchases made from overseas suppliers from July 1st 2017. What does this mean? Well, up until July 1st 2017, overseas sellers do not need to charge us GST (and pay it to our government) for purchases by us under $1000. This gives these overseas businesses a decided advantage compared to our local businesses as they can charge us a lot less because they do not have to charge us GST. That’s one reason why buying overseas is so appealing to us.
It makes sense that Australian small businesses have fought long and hard for the government to remove the $1000 threshold, arguing independent Australian retailers have been placed at a significant disadvantage in comparison to global giants such as Amazon.
But why will it take so long to come into effect? The reason it won’t be enforced until July 1st 2017, is because it gives the Tax office time to ramp up and target businesses like Amazon and get the system working. They probably know who the top 50 overseas suppliers are and they will work their way from the top down.
Sure, when it comes into effect, it means that online overseas purchases by us cost more, but it also means that the Australian government is collecting more tax from these overseas sellers, many who are very big businesses, and in the long run, this will benefit all Australians. Perhaps buying locally will seem more attractive to us when it comes into effect…….