Share:
POST
TWEET
SHARE
SHARE
EMAIL

Australian marketplace imports tax 300% bigger than estimated

By Chris Dawson April 3, 2019 - 7:31 pm

Australians have an insatiable appetite for marketplace imports from platforms such as eBay and Amazon, it would appear.

Last year, the Australian Government changed the law requiring overseas merchants to collect GST on all items under $1000 whereas previously there was no requirement to do so. Now, having predicted they would collect some AUS$70 million in the entire first year from marketplace imports, tax collecting has already raked in AUS$81 million from the first quarter revised predictions of collecting well over AUS$200 million GST taxes for the full year are expected.

Partly the massive tax deluge has come from compliance – eBay for instance are automatically adding on GST and collecting it on all marketplace imports to Australia and this must have raised the expected 70% to 75% of sellers dodging the tax. It was only expected that 25% to 30% would actually comply. The rest is down to Australian’s willingness to purchase cross border and paying GST on their overseas purchases doesn’t appear to have dented their appetite.

The Australian Taxation Office has confirmed that all the major platforms have followed eBay’s steps and signed up to collect GST. They are following up on the few yet to put compliance in place. The policy of charging GST on marketplace imports came from local retailers complaining that they had to pay domestic sales tax and it wasn’t fair that overseas sellers could undercut them.

While eBay was quick to comply, Amazon took a different tactic and initially blocked Australians from buying globally saying it was too complex to collect tax. By November, just in time for Black Friday, Amazon recanted and opened up global sales allowing Australians to shop from overseas Amazon sites once again.

There are two lessons to learn from the Australian Taxation Office’s insistence that GST is collected on marketplace imports. Firstly, if you’re selling internationally then you should be marketing to Australians as paying 10% tax hasn’t put them off from cross border shopping. Secondly, it’s likely that other countries around the world have been watching Australia and at some point in the future they may too scrap de miniums thresholds and also insist that local sales taxes are collected by overseas merchants.

  • ifellow
    5 months ago

    While in the UK…….

    • 5 months ago

      ……we’re watching the tumbleweeds roll by on ebay and wondering if the 3 Stooges, the Chuckle Brothers or Del & Rodney Trotter could do a worse job of negotiating Brexit.

  • 5 months ago

    New Zealand likely to introduce later this year, reversing their current de minimis (~NZ $400). Hopefully it won’t dampen demand there either.

Featured in this article from the Tamebay Guide – companies that can help you grow and manage your business.

eBay

eBay’s mission is to be the world’s favourite destination for discovering great value and unique selection

Amazon

Amazon started as online book store and has grown to be the worlds largest online retailer.

See More Companies >

Recent Comments

43 mins ago
Stephen clifford: People need to read between lines. Royal Mail were doing well. Along comes Back, he...
5 hours ago
Jamie Martin: Royal Mail and the CWU came to an agreement. Now Royal Mail want to break...
6 hours ago
Graham,postie 22 years: Yeah let’s all roll over and do as we’re told like good little posties,let’s make...
6 hours ago
jim: does the CWU not understand the very existence of articles like this simply chip...