GST on imports of stamps into Australia - ebay to ban sales?

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GST on imports of stamps into Australia - ebay to ban sales?

Post by BigSaint »

GST on imports of goods (including stamps) into Australia - ebay to ban sales?


I received this email from Accounting Firm Pitcher Partners today:
Draft legislation released to impose GST on imports of low value goods into Australia:
The Australian Government has released exposure draft legislation to give effect to the announcement in the 2016-17 Federal Budget to extend GST to offshore supplies of goods valued at $1,000 or less where the goods are imported by Australian consumers.

The proposed changes

Currently, goods imported into Australia by a consumer with a customs value that does not exceed $1,000 are generally not subject to GST. The proposed amendments, which would come into effect from 1 July 2017, make supplies of goods valued at $1,000 or less subject to GST if the goods are purchased by consumers and are brought into Australia with the assistance of the supplier. GST registered businesses that import low value goods for the purposes of their business will not be impacted by the proposed changes.

The policy intent behind the proposed changes is to boost the competitiveness of GST registered domestic suppliers who must remit GST on all sales of taxable goods made within Australia irrespective of their value.

Once enacted, the new rules will effectively create a two tiered system for the collection of GST on imports depending upon the value of the imported goods, as follows:

For goods with a customs value of $1,000 or less – generally the supplier will have a liability to remit GST where the annual value of its Australian supplies is $75,000 or more;

For goods with a customs value of more than $1,000 – GST will continue to be payable at the point of importation by the importer, subject to the application of the deferred GST scheme.

The amendments also include provisions to prevent double taxation by making importations of goods non-taxable where the supply of the goods is a taxable supply as a result of the amendments and the importer notifies the ATO at the time of importation that the supply was taxable. This ensures that GST will not apply twice to low value goods that are imported into Australia.

A ‘vendor registration model’ will apply with respect to the collection of GST under the proposed legislation, which requires offshore vendors that have an Australian annual turnover of $75,000 or more to register for, collect and remit GST on the sale of low value goods to Australian consumers.

The proposed legislation also captures the following types of businesses (and requires them to remit the GST on supplies made through them):

Goods (freight) forwarders; and
Operators of electronic distribution platforms.

Non-resident suppliers that are required to register for GST as a result of the changes will be able to be ‘limited registration’ entities, which gives them access to simplified GST registration and reporting obligations. However the trade-off is that they will not be entitled to claim input tax credits and cannot obtain an Australian Business Number.

Practical issues to be aware of:

The proposed amendments are broader than the Netflix Tax amendments introduced earlier this year, which will also come into effect from 1 July 2017 but which will only apply to supplies of intangibles made to ‘Australian consumers’ who are tax residents of Australia at the time of the supply. In contrast, the low value goods amendments will apply to any recipient importing goods into Australia in circumstances where:

the recipient is not registered for GST;

or

if the recipient is registered for GST, they do not acquire the goods solely or partly for the purpose of an enterprise they carry on in Australia.

This will potentially capture situations where the recipient is located overseas at the time of importation but directs delivery of the goods to someone else in Australia.

As a result of the two-tiered system for collection of GST referred to above, offshore vendors will need to assess the robustness of their sales systems to ensure they can accurately identify transactions where GST will now apply.

This is likely to involve introducing an additional step into the sales process to identify the GST registration status of the customer.

We expect that a significant number of offshore vendors will be caught by the amendments and will be required to register for GST from 1 July next year. The effectiveness of the collection of GST will depend largely on the awareness of the changes in the offshore marketplace as well as the ATO’s policing of the regime.

The ATO is likely to focus on large market players and freight forwarders/electronic distribution platform operators that make significant sales to Australia, rather than focusing on the vast number of smaller offshore vendors.

However, all offshore vendors with Australian sales that are projected to meet the $75,000 per annum registration threshold should review the amendments and consider their obligation to register for GST with effect from 1 July 2017.

From the Australian consumer’s perspective, we expect that the price of goods purchased from affected entities will increase from 1 July 2017 on account of the additional GST payable by the vendor.

The Australian Government has invited public comments on the exposure draft by 2 December 2016.

:roll: :roll: :roll:
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Re: GST on imports of low value goods into Australia

Post by BigSaint »

Where does one start on the issues with this :?:

1. How will someone overseas be aware they should be registered for Australian GST?

2. How will the Australian Tax Office know an overseas business has a turnover of greater than $A75,000 to Australian Consumers?

3. How are the Australian Tax Office going to enforce compliance upon a non-resident business?

4. Will this mean that Customs/Aust Post will stop opening overseas mail looking for GSTable items?

5. How will the Australian Tax Office collect the GST collected in the overseas country?

Let's hope this hair brained scheme will be "Trumped" before it ever starts.

Brad :)
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Re: GST on imports of low value goods into Australia

Post by Global Administrator »

BigSaint wrote:

The ATO is likely to focus on large market players and freight forwarders / electronic distribution platform operators that make significant sales to Australia, rather than focusing on the vast number of smaller offshore vendors.
Sounds like they are targeting amazon.com type sellers.

Sounds near impossible to administer.

Had they had any brains they'd have never raised the limit from $400 to the current $1000 in the first place. :roll: :roll: :roll:

They should have REDUCED it to $200. And hence easily collected a BILLION dollars or so in the past 3 years.

POs are fully set up to collect this tax. Zero extra work or systems needed. LPOs get a slice of what is collected, so they are vigilant.

NOW, anyone buying a new 1Phone, Camera, Perfume, tablet or stamps etc from overseas pays ZERO tax.

Dealers like Harvey Norman and JB HiFi etc, make zero on that iPhone or Camera if consumers buy it from Asia or USA etc. :twisted:

There is the answer, if they want to get taxes on what the public import. Bog obvious, and the idiot who changed it from $400 has cost a Billion in lost revenue.

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Re: GST on imports of low value goods into Australia

Post by ekbustad »

So what about the vendor who is on-track to sell less that $75K to Australian buyers for most of the year, but then has a spike in sales at the end of the year that pushes him over the limit?

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Re: GST on imports of low value goods into Australia

Post by BigSaint »

ekbustad wrote:So what about the vendor who is on-track to sell less that $75K to Australian buyers for most of the year, but then has a spike in sales at the end of the year that pushes him over the limit?
An Australian vendor is required to register once they realise they will go over $75,000 & collect GST from that time. I would imagine that would be the same for an overseas vendor. I would imagine if an overseas vendor didn't register & went over $75,000 the ATO would deem one-eleventh of the total proceeds to GST.

However before they do that they have to identify the overseas seller.

A smart overseas seller may then sell in own name & in his wife's name, so effectively $75,000 each becomes $150,000.

Brad :)
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Re: GST on imports of low value goods into Australia

Post by Allanswood »

A news item piqued my interest this morning as it was all about the new GST on all overseas purchases (when it used to be above $1,000 only) and how this will impact customers that buy on such places as Ebay.

Ebay have commented that they are not in this business of collecting tax for other countries.

The upshot of this is that they said they will simply BLOCK Aussies from buying overseas goods no matter what value!


This does not bode well for hobbies and trade and smacks of consumer censorship.

If something is not available here, how do I buy it? If something is second hand (like a garage sale) why is there GST anyway?

If I get a bargain stamp for $5.00 delivered, will they really send out the wolves to make sure that I pay 50c GST? How will they collect it? Customs to monitor? AP to not release item until 50c is paid? Is any of that actually worth it below recouping at least $20?
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Re: GST on imports of low value goods into Australia

Post by GlenStephens »

I can only repeat this common sense advice!

Likely MORE than a Billion lost, in that one needless and dumb change.
Global Administrator wrote:
Had they had any brains they'd have never raised the limit from $400 to the current $1000 in the first place. :roll: :roll: :roll:

They should have REDUCED it to $200. And hence easily collected a BILLION dollars or so in the past 3 years.

POs are fully set up to collect this tax. Zero extra work or systems needed. LPOs get a slice of what is collected, so they are vigilant.

NOW, anyone buying a new 1Phone, Camera, Perfume, tablet or stamps etc from overseas pays ZERO tax.

Dealers like Harvey Norman and JB HiFi etc, make zero on that iPhone or Camera if consumers buy it from Asia or USA etc. :twisted:

There is the answer, if they want to get taxes on what the public import. Bog obvious, and the idiot who changed it from $400 has cost a Billion in lost revenue.
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Re: GST on imports of low value goods into Australia

Post by dukeprince »

If I read this correctly if I buy an Ebay Stamp overseas and that Seller does not sell over $75k to Australia then all is normal as per now.

However if Ebay decide they dont want to play the Aussie Govts game , ebay overseas sellers Stamps will not be available to me at all .

Can I still list and sell world wide?

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Re: GST on imports of low value goods into Australia

Post by BigSaint »

dukeprince wrote:If I read this correctly if I buy an Ebay Stamp overseas and that Seller does not sell over $75k to Australia then all is normal as per now.

However if Ebay decide they dont want to play the Aussie Govts game , ebay overseas sellers Stamps will not be available to me at all .

Can I still list and sell world wide?
The proposed change in GST law should not affect Australian sellers to Overseas or Local customers so you should be able to sell from Australia to world wide. This Law is aimed at imported goods.

The practical question I ask who is going to tell the Australian Tax Office that an ebay vendor based in Alaska has made more than $75000 sales to Australia in a year. "Big" sellers will have multiple ID's which will make it more difficult for identification.

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Re: GST on imports of low value goods into Australia

Post by BigSaint »

For anyone who would like some bedtime reading, this is from the ATO website:
International taxation of goods and services supplied to Australia
If you are a non-resident and make supplies of goods, services or digital products to consumers or GST-registered businesses in Australia, new GST rules apply to you.

Find out about:

GST on services and digital products
GST and cross-border transactions between businesses
GST on low value imported goods
Registering for GST

GST on services and digital products

From 1 July 2017, goods and services tax (GST) 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
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 for GST.

See also:

New Australian law applying GST to imported digital products and services
GST – applying to digital products and other services imported by consumers

GST and cross-border transactions between businesses

From 1 October 2016, certain transactions between overseas businesses and Australian businesses are no longer subject to GST.

Review your enterprise arrangements and consider whether you still need to be involved in Australia’s GST system.

See also:

GST cross-border transactions between businesses
Cancelling your GST registration
Law Companion Guide 2016/1 GST and carrying on an enterprise in the indirect tax zone (Australia)

GST on low value imported goods

The government has announced that from 1 July 2017 GST will apply to imported low value goods. This includes all physical goods sold to consumers and imported into Australia that have a value equal to or less than A$1,000. These goods are currently exempt from GST.

Under this measure, you may need to register and pay GST if you:

are a non-resident supplier who sells low value goods to consumers and import the goods into Australia, and
meet the registration turnover threshold of A$75,000.

See also:

GST on low value imported goods

Registering for GST

Non-resident businesses can choose to register in the existing full GST registration system or the simplified GST system for non-residents.

You only need to register once, even if you supply more than one type of good or service.

Note: Being registered for GST purposes does not mean you are a permanent establishment for income tax purposes.
Simplified GST registration system

Under the simplified GST system, non-resident suppliers of goods or digital products and services will be able to register online with minimal information.

Next step:

If you want us to tell you when the simplified GST registration system is available, email AustraliaGST@ato.gov.au.

Full GST registration system

To register under the full GST registration system, you need to:

Apply for an Australian business number (ABN)External Link
Register for an AUSkeyExternal Link
Register for GST

See also:

GST registration information for a non-resident

More information

For more information about imported services and digital products or the GST simplified system for non-residents:

Send an email to us at AustraliaGST@ato.gov.au.
Phone us on +61 2 6216 1111. Our business hours are 8:00am to 5:00pm, Australian Eastern Standard Time (AEST) or Australian Eastern Daylight Saving Time (AEDST) Monday to Friday, except for national public holidays. Please advise the operator to connect you to 1300 146 094, then wait until you hear instructions to enter '118#'. You will be transferred to an officer who can help you.
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Looks like my ebaying will be over :!: :twisted:
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Re: GST on imports of low value goods into Australia

Post by capetriangle »

All concerned

Life is getting too complicated, we should simply cheat on all things, like we do in the U.S.A.

Kindest regards

Richard Debney

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Re: GST on imports of low value goods into Australia

Post by GlenStephens »

Richard you work for Spink New York, and I'd be interested to hear if they or London plan to register for GST here, as you would both do well over $A75,000 ($US56,000) a year I am sure to ozzie buyers?

Will be a nightmare for foreign auctions. An incredibly dumb idea.

No ozzie auction or dealer needs to Register for UK, NZ, Canada or Europe VAT etc.
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Re: GST on imports of low value goods into Australia

Post by capetriangle »

Glen

Actually I am no longer with Spink USA.

Kindest regards

Richard

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Re: GST on imports of low value goods into Australia

Post by GlenStephens »

Well, I'd be curious to hear what they or Seigels or Harmers etc do, re this new rule.

Absolutely ZERO I am guessing - what penalties do they risk?
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Re: GST on imports of low value goods into Australia

Post by billw2 »

So,

Say I'm a business in, say, Canada.

And Australians buy $75k or more a year from me... I'm now required to register and collect GST on behalf of the Australian government?

:lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

Who thought this genius idea up?

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Re: GST on imports of low value goods into Australia

Post by Matenaser »

With bureaucracies, anything is theoretically possible... How they will manage to enforce it is another matter totally. :roll:

However it becomes a very effective deterrent against buying from overseas if companies like Ebay decide to bar all Australians from overseas purchases :!:

Here VAT must be levied on basically any goods imported from outside the EU with a value in excess of 22€ (postage included). And VAT in Belgium is at 21%, not petty percentages like Australian GST or U.S. sales and use taxes.

Add to this import duties and customs handling charges, and you end up paying as much in taxes as you paid for your goods in the first place, even for a pair of cheap Chinese-made shoes.

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Re: GST on imports of low value goods into Australia

Post by GlenStephens »

http://www.smh.com.au/business/retail/ebay-threatens-to-bloc ... vmkoe.html

eBay says it will likely block Australian shoppers from buying goods from overseas if the government pushes ahead with plans to apply GST on all goods sold through the online marketplace.

Goods bought from overseas sellers and imported to Australia worth less than $1000 are currently GST exempt, but Treasurer Scott Morrison wants to apply the 10 per cent tax to all sales from July 1 this year.

"Regrettably, the Government's legislation may force eBay to prevent Australians from buying from foreign sellers," eBay Australia and New Zealand vice president Jooman Park wrote in a submission to a senate inquiry into the so-called "Amazon Tax".

"This appears to be the most likely outcome at present.

The $300m GST grab hardly anyone knows about

"No tax would be paid to Australia and none would be owed. It would raise no revenue, deny Australians access to choice and lessen price competition."

Mr Park said an eBay ban would not even help local bricks and mortar retailers - who have been lobbying for the tax - and nor would the tax generate significant revenue, because Australians would simply move to "opaque parts of the internet" where they could buy from online retailers that did not comply with the new rules.

The proposed tax treats online sales platforms like eBay and Amazon as the supplier, meaning they would be responsible for applying the tax.

But eBay said that it did not own, hold or distribute goods, nor handle payments.

eBay said blocking overseas sellers was "the most likely outcome at present".

"In reality, buyers use the eBay search engine to find goods and choose which seller to transact with," Mr Park said.

"Deeming eBay to be a seller is a fiction designed by the Government to give the impression of raising revenue."

eBay said Australians would shop on "opaque parts of the internet".

Mr Park also said the proposed tax was overly complex, with goods worth under $1000 having tax applied by the seller while goods worth over $1000 would be shipped tax-free and taxed by Australian customs upon entry to the country.

"Separate goods in one box would appear to attract both tax treatments," he said.

Mr Park suggested shipping companies, including Australia Post and its parcel arm StarTrack, be made responsible for tax.

"These companies can require buyers to declare whether a good is new and to nominate a value of the good as part of the pricing of parcel delivery to Australia," he said.

In its submission, Amazon said GST should be levied on all goods but said it shouldn't have to collect the tax, agreeing with eBay that shipping companies should be made responsible.

The July 1 start date for the new tax was "completely unrealistic", with both businesses and government unable to implement required changes by then, Mr Park said.
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Re: GST on imports of low value goods into Australia

Post by norvic »

Just to explain how a requirement to charge local tax on goods moved to another country already works in Europe, here is how the European Single Market works (may not apply to the UK for too much longer)

Advice on Intra-EU trade and VAT registration. (Armstrong Watson, Business and Accounting Financial Advisers)
Cross border transactions is one of the most complex areas of VAT. If they are part of your business activities it is vital to ensure that you understand the relevant rules.

This article will centre on the distance selling rules which are key when goods are sold to non business customers in other EU countries.

When goods are sold to business customers who are VAT registered in other EU countries, these goods are zero rated for UK VAT as long as the goods leave the UK, with the customer accounting for any VAT due as an acquisition in the customer’s country.

However, the rules are different for the sale of goods to non VAT registered businesses, which may include: private individuals; some small businesses; businesses who only have exempt activities; public bodies and charities.

Sales of goods to these entities will have UK VAT charged on them until the distance selling limits are breached.

Each EU country has a choice between setting an annual distance selling limit of either €35,000 or €100,000.

A VAT registered UK business must keep a record of all sales on a calendar year basis to customers in each of the other EU countries.

Once sales to non VAT registered customers in another particular EU country breach the distance selling threshold of that country, then UK VAT should stop being charged on sales to that country and a VAT number must be obtained in that country.

So for example once sales to non registered customers in France exceeds the French distance selling limit of €100,000 in any given calendar year, there is a compulsory requirement to obtain a French VAT registration and begin charging French VAT on any further sales made to French non business customers. This treatment is mandatory and although it may be tempting for some businesses who breach the thresholds to continue charging UK VAT on all these sales in the hope that the tax authorities in that country do not discover this, this would not be recommended (as well as being against the law) as this could lead to major issues down the line if the issue is discovered. Having to obtain a late foreign VAT registration and correcting the VAT charged on sales going back would not be recommended.

Businesses that supply goods to non registered customers in other EU Countries can choose to register and account for VAT in the EU Country where their customers belong prior to exceeding the distance selling threshold if they wish.
In principle the end-user is always subject to VAT*. The consumer (collector in our case) will pay the appropriate rate of VAT on purchases in his own country and will be charged the other country's VAT for acquisitions from other EU countries. (Note these are not 'imports' they are intra-EU acquisitions: Imports only come from outside the EU.)

So, any trader registered in EU country 'A' whose turnover to EU country 'B' passes country B's Distance Selling threshold must stop charging Country A VAT and register in Country B to charge local VAT.

Potentially, a trader selling to non-registered customers in many countries in Europe could be obliged to register in all those countries. This involves complying with local rules, and it is best to appoint a local adviser. These will often have a relationship with the trader's UK accountants. This has been the case since 1992: the thresholds may have changed but the principle is the same.

*VAT rates vary between EU states; what is standard-rated in one country may have a lower rate in another, or even be zero under historic transition arrangements. Thus UK current postage stamps from Royal Mail are exempt (not zero-rated) within the UK, but presentation packs (for example) are partially-exempt and partly standard rated (20%) on the element over the face value.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by GlenStephens »

Where there is smoke, and for a Government that is frantic for ways to raise funds ...........


https://www.itnews.com.au/news/govt-denies-plans-to-block-re ... gst-437218

Govt denies plans to block retail sites that don't pay GST
Says powers have been available, but not used, for ages.

The federal government has deniedthe tax office intends to use a legislative loophole that would allow it to block access to overseas websites that don't collect the goods and services tax on products sold in Australia.

It followed a report by consumer group Choice this week which brought to light powers under the Telecommunications Act that would allow the government to force telcos to block access to foreign retail sites for the purpose of enforcing tax law.

Treasurer Scott Morrison last night said the powers had been around "for decades" and had yet to be used by the Australian Taxation Office.

".. there's nothing to suggest to me that this is something they'll put on the top of their list," Morrison said on Sky News.

Choice quoted an unnamed Treasury official as saying the loophole would be used as a last resort.

The government's so-called Netflix Tax Bill was unveiled last year and passed into law in May. It will see the 10 percent GST applied to all digital goods bought by Australians from overseas sites from mid-next year.

The ATO will ask companies that sell more than $75,000 worth of products into Australia, and not-for-profits selling $150,000 worth of goods, to register with the tax agency for GST collection.

The bill came as part of a package of policies and legislation intended to stamp out tax avoidance by multinationals operating in Australia, which included the government's decision to remove the $1000 GST-free threshold for locally-sold online goods by mid 2017.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Uppercanadian »

I am envious of our Australian cousins!! In Canada, we must pay VAT on all imports valued over Can$20.00.

I read that this has must to do with the Australian retailers complaining that they must compete against overseas sellers who do not pay their fair share of taxes. I can certainly see there point, nevertheless, it does seem to be the way much of the world is going, where retail stores have become nothing more than showrooms. Consumers go to the stores, look around, compare products and features, then go home and order them online.

VAT, or GST as we call it, and DUTY, is actually collected by the courier (DHL/UPS/FedEx) or by Canada Post. Canada Post charges a $5.00 fee for this, even if they are only collecting $1.00 from the consumer/importer. Courier companies charge more. YOu can of course appoint your own customs broker for the clearance. But the onus is on the consumer to pay the duties and taxes, not the overseas supplier. After-all, any VAT is a 'pass-through' tax anyway.

I do think that some online companies have been corrupting the rules on this though - the main culprit being Amazon. Here in Canada, even if Amazon is going to stock an item, they refuse to be the Importer of Record. Therefore, it is incumbent on the overseas supplier to set himself up as a "non-resident importer".

The number of non-resident importers has been growing exponentially in the last few years and in my experience, the people/entities overseas have been cheating the system by non-declarations and many other tricks. I have yet to see Revenue Canada or Canada Border Services (customs) do anything about this so far.

In seven years, Amazon went from being forbidden to have their own facility in Canada to becoming the largest retailer in the country, paying minimum wages to tens of thousands of part-time employees that receive no benefits. And they have become remarkably adept at dodging taxes and duties. They service the consumer well, but contribute very little to the benefit of the country.

And I come to this conclusion from my 30 years in the freight forwarding business with numerous business connections at Amazon.

I don't think Australia's proposals are really realistic, unless this is just the government pandering to a vocal minority. The way they are proposing doing this is unenforceable - and once companies overseas see this, they will do all they can to minimise the amount of money that they have to pay.
All the best,
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by norvic »

Uppercanadian wrote:After-all, any VAT is a 'pass-through' tax anyway.
Not for the end user. Then it is a cost.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

I have heard, second hand & am trying to confirm, that there has been a Senate enquiry on how to collect the GST from overseas sellers on low value goods into Australia. I believe a recommendation has been made to delay the collection of GST on imports of low value goods for 12 months so the ATO can get it right the first time.

I wouldn't have thought it was too hard. Obtain an Australian Business Number (ABN), register for Goods & Services Tax (GST), complete Business Activity Statement (BAS) at end of each quarter in your local currency & forward money by Electronic Funds Transfer (EFT).

I don't think collection of monies declared is the biggest problem here but more the identification of overseas entities who should be collecting & enforcing compliance. There would have to be provision of information from the local Tax Administrations.

We already know that Ebay is reporting more than ever. $10,000 in sales in a year has Ebay reporting to the Australian Taxation Office (ATO). I also understand that Ebay USA are trialing a new rule that USA sellers must have tracking numbers on 95% of sales.

So Ebay is not the problem. It is overseas factories & retaillers that do not understand they have to register. The ATO having to identify them as having the $A75,000 in sales to Australia requiring them to register & then being able to have the cooperation of that countries Tax Authority to enforce registration & collection.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by hermes2014 »

I would simply ban australian buyers & I think a lot of sellers would do the same.
I'm not going to do extra work for a few $ of profit.....

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

hermes2014 wrote:I would simply ban australian buyers & I think a lot of sellers would do the same.
I'm not going to do extra work for a few $ of profit.....
You only have to do the "extra" work if you are selling $A75,000 to Australian buyers. So unless you are a millionaire, are you going to knock back that amount of sales? If you are approaching that amount of sales in a year, then easy enough to sell in your wife's name, so that will give you $A150,000 of sales before you have to collect GST. If you approach the $A150,000 then I suggest you shut up shop for the year & go on a holiday, you certainly will be able to afford it.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by starling »

The Australian Federal Budget for 2017 was announced tonight. I didn't see any mention of the GST on imported goods, though I didn't watch the actual announcement, I am just going on the summaries I have read in on-line reports.

Actually, things have gone a bit quiet on this issue. When the Government floated the idea there was a frenzy of TV ads from interest groups saying how terrible it would be - we wouldn't be able to buy the latest smart-phones etc. because overseas companies would refuse to sell to us, yadda yadda. Now nothing.


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Re: GST on imports of goods into Australia - ebay to ban sal

Post by langtounlad »

starling wrote:The Australian Federal Budget for 2017 was announced tonight. I didn't see any mention of the GST on imported goods, though I didn't watch the actual announcement, I am just going on the summaries I have read in on-line reports.

Actually, things have gone a bit quiet on this issue. When the Government floated the idea there was a frenzy of TV ads from interest groups saying how terrible it would be - we wouldn't be able to buy the latest smart-phones etc. because overseas companies would refuse to sell to us, yadda yadda. Now nothing.


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It does not have to appear in the Budget as the amending legislation was introduced into Parliament in February 2017. It is currently before a Senate committee which was due to report yesterday.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by GlenStephens »

Frank .. any idea what the Senate Report summarised it as?
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by langtounlad »

Glen
Report has not shown up in my tracking account yet - nothing on Parliament site to indicate when it will be tabled.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Armarantine78 »

This will never happen. You can't enforce a foreign entity to collect taxes.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

Having gone to a presentation on the budget this morning I posed the question about where this was at. The presenter said the digital media part was signed sealed & delivered but the part on other goods was still before the Senate. He had no doubt that this would be passed in coming days.
Armarantine78 wrote:This will never happen. You can't enforce a foreign entity to collect taxes.
Armarantine78, this is the part of this that I can't get my head around. Firstly how the ATO will identify those who should be charging the GST overseas & secondly how they will enforce the overseas collector to pay. I feel it could only be done with an exchange of information between Australia & the Taxation Adminstration where the collector of the GST resides.

Ebay may be able to assist with information in some countries but are currently threatening to stop sellers selling to Australia.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by langtounlad »

The report was tabled for printing on Tuesday night. No mention of when it would be presented for consideration.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by starling »

BigSaint wrote:Having gone to a presentation on the budget this morning I posed the question about where this was at. The presenter said the digital media part was signed sealed & delivered but the part on other goods was still before the Senate. He had no doubt that this would be passed in coming days.
Armarantine78 wrote:This will never happen. You can't enforce a foreign entity to collect taxes.
Armarantine78, this is the part of this that I can't get my head around. Firstly how the ATO will identify those who should be charging the GST overseas & secondly how they will enforce the overseas collector to pay. I feel it could only be done with an exchange of information between Australia & the Taxation Adminstration where the collector of the GST resides.

Ebay may be able to assist with information in some countries but are currently threatening to stop sellers selling to Australia.

Brad :)
I'm guessing that in the first instance the ATO wants to target the big fish like Amazon and Book Depository etc. Smaller sellers near the $75,000 threshold might be more problem then they're worth to chase. Non-compliance would mean they the government would have to implement web-site blocking of the non-complying sellers across all internet providers in Australia, no small task.

Though Ebay would certainly be on their radar, the 'S' of GST is Services and Ebay collects listing fees from Australian sellers, many millions of dollars no doubt, so the ATO will be wanting to slap the GST on this service.

We are only a medium-sized marketplace in the grand scheme of things, so Ebay would have no qualms about cutting us off, stopping buying and selling from Australia. Plus it would be a good object lesson to other governments contemplating this move.


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Re: GST on imports of goods into Australia - ebay to ban sal

Post by David Benson »

2016 $ 76,000 sales to Australia, has to report.
2017 $ 74,000 sales to Australia, no need to report
2018 ???,

It would be a nightmare to control,

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

David Benson wrote:2016 $ 76,000 sales to Australia, has to report.
2017 $ 74,000 sales to Australia, no need to report
2018 ???,

It would be a nightmare to control,

David B.
Absolutely & don't forget the overseas seller is selling in their local currency, for example $US. Depending on rate fluctuations one day the seller could be over & on another under when converting to $A.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by David Benson »

Many years ago I was involved with a company that bought huge amounts of merchandise from GB which attracted 27½% import duty. We received a letter from the government in February that a trigger amount has been placed on imports of that commodity has been imposed and if that trigger was exceeded by June 30th.

Then the import duty would be raised from 27½% to 47½%. As the goods had been ordered and on the way it would have meant that we had no idea what the final cost would be.

The goods were already presold allowing for the lower rate and luckily the higher rate was never imposed or we would have lost a huge amount. The rate remained at 27½% for the next 10 years before it was reduced to 2½%,

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

Yes the currency moves are crucial in such a wacko system woks.

A seller in UK doing £36,000 a year of sales in 2016 was well over $A75,000 at the TIME he sold the goods.

Brexit vote sinks Sterling mid year, so £36,000 and end of year is a lot less than $A75,000.

A nightmare to enforce.

The simple solution has been there for years, as it is in Canada, NZ, Germany, UK etc. Collect the tax upon ARRIVAL from buyer! Reduce the cap from $1000 to $100.

Then when someone orders in the new Apple iphone for $US600 from the UA pays 10% GST upon arrival. As it perfectly fair and logical. Right NOW the Feds get not one CENT from such imports. And under the new system they likely will not either!

Govt would have made BILLIONS by now if they implemented that. Instead of talking about it.

AP collects it, as they collect it now for shipments over $1000. Simple.

Whatever 10% of £400, 400 Euro or $US400 is on day of arrival is the tax owed.

They'll rake in FIVE times more then, as no-one escapes the nett.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by jrg »

Glen, your method would only work where there is external evidence of the contents and value. So would certainly trap some, but certainly not all, potentially taxable incoming items.

Otherwise, we would have a monumental holdup of ALL incoming mail.

EVERY letter would have to be opened and inspected - it would be a simple matter to send a few hundred dollars worth of stamps in a plain unregistered letter from England to Australia. And if there's no invoice enclosed (which the smarties would make sure was the case), how are the stamps valued for GST purposes? Sent to a dealer for valuation? Ka-ching - more cost and time.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

John, 99.99% of incoming goods of several $100s value type are NOT stamps. And near all have invoices and value declared on outer.

Even stamps from most auction house have real invoices. Spink, Gaertner, Feldman etc all do that now.

Simple matter to add 10% to that. No extra work. Pay on collection at PO. No pay - no get.

Works like a dream in NZ, Canada, UK, Europe for decades and their mail is not unduly held up.

Chicken Sh*t sendings of $30 or $50 they are not interested in. Never were.

Right now ... virtually NONE of the imports are paying one cent in oz tax. Insane. A camera or ipad or Samsung8 or tablet etc from overseas, simply deprive Harvey Norman and others from making a living. AND collecting the 10% GST on it.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

Glen

Surely you jest about Harvey Norman:

Harvey Norman
Type - Public Company (ASX: HVN)
Industry Retail: Computer, Electrical, Furniture and Bedding goods
Founded Auburn, New South Wales (October 1982 (age 34))
Founder Gerry Harvey & Ian Norman
Headquarters Homebush West, New South Wales, Australia
Number of locations - 194 (Australian, franchised), 86 (overseas, company owned)
Key people:
Gerry Harvey, Chairman/Co-Founder
Ian Norman, Co-Founder
John Slack-Smith, Chief Operating Officer
Katie Page, Managing Director
Chris Mentis, Chief Financial Officer
Revenue Increase A$5.3 billion (Australia) (2016)
Operating income - Increase A$523 million (2016)
Net income - Increase A$349 million (2016)
Number of employees - Est. 10,000 (Australia Only)
https://en.wikipedia.org/wiki/Harvey_Norman
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

BigSaint wrote:
Glen

Surely you jest about Harvey Norman:

Net income - Increase A$349 million (2016)
Number of employees - Est. 10,000 (Australia Only)
They are a smart business model. I know some Australians often dislike and denigrate tall poppies. I don't. They work hard at what they do.

The internet is killing many traditional once profitable businesses. The feds just excused all the Commercial TV networks $130 MILLION in license fees as Amazon and google are killing them with ads stolen, they claim. Battlers like Kerry Stokes and John Singleton etc REALLY need your help to bail them out of course. :lol: :lol:

Most of what they sell - Bedding, Fridges, lounge suites, large TVs, washing machines etc can't be mailed from New York or China.

Image
Brad you work with figures for a professional living. These phones cost a tad under $1000 landed bought from overseas. Right NOW that is totally GST free. Legally. Agree?

Just a few of them a DAY sold nationally by the vast ~200 store network of Harvey Norman stores is $A1 MILLION p.a. extra revenue right?

Just TEN a day sold nationally is ~$3 million extra revenue. Agree? 100 a day sold right over their 200 stores daily (1 a day per every 2 stores) is ~$30 million revenue right? Extra sales from just ONE retailer, if folks do not bother in future to import them. $3 million a year in GST collected, just on one phone from one retailer.

So more profit, more taxes paid, and more staff employed. Just on iPhones! Forget the other 1000 stock lines, that also cascade in each day to mailboxes by the plane load, at ZERO gain to Feds in tax.

None of them add one cent of tax to Feds, not one bean to the retailer shareholders, and the Super funds who invest in those, and creates not a single job.

Total No Brainer. Buy them locally, and the country gains.
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Re: GST on imports of low value goods into Australia

Post by 60022Mallard »

Matenaser wrote:With bureaucracies, anything is theoretically possible... How they will manage to enforce it is another matter totally. :roll:

However it becomes a very effective deterrent against buying from overseas if companies like Ebay decide to bar all Australians from overseas purchases :!:

Here VAT must be levied on basically any goods imported from outside the EU with a value in excess of 22€ (postage included). And VAT in Belgium is at 21%, not petty percentages like Australian GST or U.S. sales and use taxes.

Add to this import duties and customs handling charges, and you end up paying as much in taxes as you paid for your goods in the first place, even for a pair of cheap Chinese-made shoes.
You appear to be saying that the EU is not the outward looking, global free trade organisation many seem to think, rather one trying to put up barriers to prevent EU citizens from benefitting from world prices and protecting local industries from competition!

I am shocked.

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by David Benson »

re.
The internet is killing many traditional once profitable businesses
and that includes stamp dealers,

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

Only to the old fashioned dealers, who have never embraced the internet David.

I was talking to Kevin Morgan, Richard Juzwin and Michel Eastick recently, and all 4 of us have never seen such business. VERY heavily web driven, but the big sales are there, if you expose the goods to the global market.

The days of crammed, dingy, and jumbled olde-worlde bricks and mortar stamp shops are nearly gone - for better or for worse, however it is a fact.

Glen
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by kerailija »

Not sure how many knows, but EU has got somewhat similar action coming into force in Jan 2021. Here's the latest press release that was put out late last year (but this has been under works for a long time): http://europa.eu/rapid/press-release_MEMO-16-3746_en.htm

The key chapter in there is:
After 2021, all goods bought online by EU consumers from sellers outside the EU will also be subject to VAT, in line with current EU sales practices.
So basically EU is abolishing the VAT exemption for import of small consignments (less than EUR 22 of value, including postage). Needless to say this will definitely have an affect on where European collectors will buy, and even more likely it will affect on non-EU sellers willingness to sell to EU collectors (no matter how simple the system, it will still add up the costs in form of accounting, invoicing systems, time etc)

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by satsuma »

Surely there is only half an argument going on here. If it's sensible for a government to impose gst on private not for profit importation of inwards goods then it must also be sensible for that same government to impose gst on the export of goods to private not for profit purchasers.

Like many on this board, I regularly buy from Australian dealers and auction houses. One of the reasons I choose to develop relationships with certain vendors is their not charging me gst as is currently legal.

If Australian vendors do not recognize my current gst exempt status, then they may benefit from a one-off purchase, but no relationship develops.

Even a moderately cognitive beaurocracy is going to consider both halves of this concept.

How long before your and others Internet sales get caught up in this, Glen?

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by DJCMH »

What I fear we are seeing is the impact of the politics of economic "nationalism" at work.

Local retailers feel they are facing unfair competition from overseas online retailers, so pressure the State to protect local retail by creating systems such as what is being proposed for Australia and, it looks like, the EU.

Who is the big loser in all this? The consumer, who will now have to pay higher prices for the goods they want in order to protect the local retailer.

So much for the integrated global economy that the internet and improvements in modern transportation and communication technology could provide the world in the 21st century, this is just another piece in the new wall of trade autarky that is increasingly developing across the world, as those economic interests who can not adjust to the new realities of the global marketplace seek protection to continue on as they were before.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by kerailija »

DJCMH wrote:What I fear we are seeing is the impact of the politics of economic "nationalism" at work.
IMHO it's not as black/white.... The world around is simply not the same it was when VAT/GST systems were created.

In case of EU the change is about restructuring, simplifying and modernizing the whole VAT-system (which in current state is bloody bureaucratic and expensive from business perspective). Basically the whole cross-border sales stuff, not just non-EU but also within EU is being rewritten and reimplemented (and at least this SMB-business owner is cheering for most of the upcoming changes).

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

If passed, Australia would be the first country in the WORLD to require foreign sellers and marketplaces to collect and remit GST on any item, no matter how small. The massive online retail giants Amazon, eBay, Etsy and Alibaba all oppose the measure. "The Sydney Morning Herald" ran this piece in latter April - www.tinyurl.com/OzGST

Alibaba is the most dominant retailer in the world, generating more gross merchandise volume (GMV) than Amazon.com and eBay combined. Its online sales & profits surpassed all US retailers (including Walmart, Amazon and eBay) combined.

Alibaba director of business development Australia and New Zealand, Mr John O'Loghlen said “foreign small businesses are particularly disadvantaged on compliance on this rule, because of the $75,000 GST turnover threshold.”

“A Chinese merchant selling into Australia through AliExpress will see GST will be applied to every single sale, even if this Chinese seller's entire Australian sales revenue is just a couple of hundred dollars for the relevant year” Mr O’Loghlen continued.
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Re: GST on imports of goods into Australia - ebay to ban sal

Post by BigSaint »

Glen

I don't know of Alibaba, but are they conglomerating smaller sellers sales through themselves & as a result Alibaba is over the $75,000 threshold for charging GST?

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Re: GST on imports of goods into Australia - ebay to ban sal

Post by Global Administrator »

BigSaint wrote:Glen

I don't know of Alibaba, but are they conglomerating smaller sellers sales through themselves & as a result Alibaba is over the $75,000 threshold for charging GST?

Brad :?

Brad - Alibaba makes ebay look like a corner store. I suspect they might be doing a tad over $75,000 a year to here. I spend a few $1000 myself. :mrgreen: :mrgreen: :mrgreen:
Global Administrator wrote:
Alibaba is the most dominant retailer in the world, generating more gross merchandise volume (GMV) than Amazon.com and eBay combined. Its online sales & profits surpassed all US retailers (including Walmart, Amazon and eBay) combined.
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