In the ongoing global struggle for countries to compete for taxes, Australia has now moved to collecting GST on low value goods.
The Australian Government has passed the Treasury Laws Amendment (GST Low Value goods) Bill 2017, which will extend GST to low value imports of physical goods imported by consumers from 1 July 2018. Under the original proposals, the Australian Government was looking to introduce these new rules in 2017 however, during the legislative process the commencement date has been deferred.
New Zealand businesses that are selling low value products into Australia (to consumers) will need to review their GST position in Australia to determine whether they now need to register and account for Australian GST.
Businesses that meet the A$75,000 registration threshold will need to review their business systems now to ensure their compliance.
The existing processes to collect GST on imports above $1,000 at the border are unchanged.
In summary, the reforms:
- make supplies of goods valued at A$1,000 or less at the time of supply ‘connected with Australia’ if the goods are purchased by consumers and are brought into Australia with the assistance of the supplier;
- treat the operator of an electronic distribution platform (EDP) as the supplier of low value goods if the goods are purchased through the platform by consumers and brought into Australia with the assistance of either the supplier or the operator;
- treat re-deliverers as the suppliers of low value goods if the goods are delivered outside of Australia as part of the supply, and the re-deliverer assists with their delivery into Australia as part of a shopping or mailbox service that it provides under an arrangement with the consumer;
- allow non-resident suppliers of low value goods that are ‘connected with Australia’ to elect to access the simplified registration and reporting system.
If you are exporting your product to consumers in Australia please contact your Hayes Knight advisor to help review your GST position. Hayes Knight is part of an international affiliation of accounting firms and therefore we can also seek assistance from our colleagues in Australia if required.