Australia May Drop GST Threshold on Online Sales

December 29, 2014 Taxation in Australia

CANBERRA – Consumers in Australia will soon face higher prices for goods, as the government is looking at charging GST on all online purchases.

In a recent radio interview, the assistant treasurer of Australia Josh Frydenberg announced that the government will evaluate the feasibility and practicality of applying GST to online purchases worth less than AUD 1 000.

Currently, GST is not applied to purchases of goods worth less than AUD 1 000 from internet retailers located outside of Australia.

The assistant Treasurer noted that in the past the threshold has not been removed, or even reduced, as the compliance costs of enforcing the rule were too high, however, continuing improvements to internet technology and monitoring methods mean that it is now possible for tax authorities to ensure enforcement of the rules.

The announcement was met with immediate support of the Australian Retailers Association, which claims that reducing the threshold should be slashed to AUD 30, or even removed entirely, and that removing the threshold ma help bring back 30 000 jobs which are lost to the fact that consumers prefer to purchase cheaper goods online.

Photo By: Ministerio TIC Colombia