Friday, 30 December 2016

Australia: GST to apply to low value imported goods

The Australian government issued draft legislation on 4 November 2016 that would extend the goods and services tax (GST) to apply to low value imported goods.
Based on the proposed changes, which would apply as from 1 July 2017, foreign entities with an annual GST turnover of AUD 75,000 or more would be liable to account for GST on goods with a value lower than AUD 1,000 supplied to
unregistered Australian consumers; goods with a value exceeding AUD 1,000 would continue to be taxed upon importation.
The obligation to account for GST would rest with either the overseas supplier, the operator of an electronic distribution platform (EDP) or the “goods forwarder” (i.e. the entity that assists consumers in bringing goods they
have acquired overseas into Australia). The overseas supplier would be directly liable to account for GST on the goods sold directly to customers, unless it obtains a statement from the customer and the supplier reasonably believes the
goods to be imported will result in a taxable importation. Alternatively, if the sale is made through an EDP that meets certain requirements, the EDP would be liable to account for GST on the sale, unless the EDP agrees with the overseas
supplier for the liability to revert back to the supplier. Goods forwarders generally would be liable to account for GST only if they are directly engaged by the customer.
Registered businesses in Australia that purchase low value goods for business use would not have GST applied to such goods if they quote their Australian business number to the overseas supplier. If a consumer makes misrepresentations when dealing with the overseas supplier, the consumer could be subject to penalty provisions.
Source: Deloitte