Australia Confirms Netflix Tax

May 13, 2015 Taxation in Australia

CANBERRA – Buying and streaming songs, movies, shows and games will become more expensive for Australian consumers within a matter of years due to the newly confirmed implementation of GST on such goods.

During the announcement of the national budget plan the Federal Treasurer of Australia Joe Hockey announced that by the end of 2017 GST will be applied to the online sale of intangible goods.

Currently intangible online goods do not face GST of 10 percent if purchased from suppliers outside of the country, however, the government now believes that bringing such purchases within the tax net will net as much as AUD 350 million over the course of 4 years.

The goods which fall under the scope of the new legislation are mainly online services, such as the purchase of songs from iTunes, the purchase of games from Steam, or the streaming of movies from Netflix.

Over the last few weeks the tax has raised significant controversy, as consumers in Australia already pay much more for online goods than consumers in other developed countries.

The tax has already come to be commonly referred to as the “Netflix Tax”.

According to the Treasurer, the government will consult with key figures from the industry to discuss the implementation of the tax, but he stated that it will most likely be the responsibility of the supplier to collect the tax on behalf of the government, even if the supplier is not based in Australia.

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