Australia has introduced a new law applying the Australian Goods and Services Tax (GST) to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales from 1 July 2017. On November 25, 2016 the Australian Taxation Office issued a Business Bulletin titled: “Transitional rules: GST on imported services and digital products”.
The business bulletin reads as follows:
“Overseas businesses may be subject to the transitional rule for goods and services tax (GST) when supplying services or digital products to consumers in Australia.
The transitional rule applies to periodic or progressive supplies that commence before 1 July 2017 and continue after 1 July 2017. Supplies made progressively over a period of time are treated as being supplied continuously over that period.
If you make a supply before 1 July 2017 and the period of the supply extends beyond this, the portion after 1 July 2017 may be subject to GST. The GST is payable in the first tax period after 1 July 2017.
This commonly occurs when selling subscription services to consumers. For example, if you sold a 12-month subscription in September 2016, the portion of the sale from 1 July 2017 is taxable, so you will need to pay GST on the portion of the subscription for July and August 2017.
The changes relate to a broad range of imported products and services, including:
· digital products, such as movies, music, apps, games and e-books
· services, such as architectural or legal services.
If you meet the registration turnover threshold of A$75,000 and make these supplies, you will be required to register and pay GST.
You can email any questions you have about the transitional rules to This email address is being protected from spambots. You need JavaScript enabled to view it..”
The business bulletin also includes the foolowing 2 links:
· New Australian law applying GST to imported digital products and services
· Transitional rules case study
Copyright – internationaltaxplaza.info
Follow International Tax Plaza on Twitter (@IntTaxPlaza)
and
Follow International Tax Plaza on Facebook
