Tax may be paid by off-shore suppliers to Australians The GST review said the option ?most likely to be successful''
ONLINE customers of overseas suppliers would have to pay the GST for the first time under preliminary options handed to the Government today.
They would be taxed as if the goods had been bought from an Australian shop.
The most favoured option was for the tax to be paid by off-shore suppliers of goods and services sold to Australian customers.
“Information provided by debit and credit card issuers or intermediaries would be an extremely convincing voluntary compliance tool and it is considered that large companies would be more likely to comply than not,'' said the interim report.
The practice already exists overseas where big online retailers such as Amazon have to pay a variety of indirect taxes across several jurisdictions.
“Amazon complies with many VAT and US taxation requirements, so why does it comply with some indirect tax laws and not others?'' asked the GST Distribution Review preliminary report released today.
''The answer, quite simply, is that those countries' tax laws say it has to.''
The inquiry panel has made no firm recommendation to the Government and will not issue a final report until towards the end of the year.
Major retailers have complained they have to compete with overseas suppliers who don't have to pay the same taxes on sales.
Last August the Productivity Commission said the GST-free threshold value for online goods bought from overseas be lowered from the current $1000.
But the commission questioned whether the move would be cost effective as the cost of compliance could be greater than the amount of tax raised.
The GST review said today the option “most likely to be successful'' was for “offshore suppliers have liabilities under the existing law of which they are unaware''.
This would involve simple GST registration, lodgement and compliances processes with “certainty and clarity'' in the system.
This would involve “the identification of, and communication with, the major suppliers to Australian customers to ensure their voluntary compliance with an increased scope of the Australian GST''.
