
Aus Government will block overseas websites that refuse to collect GST - caf
https://www.choice.com.au/shopping/online-shopping/buying-online/articles/gst-overseas-website-block
======
andrewstuart
"It's critical to understand that the website blocking capability will only
ever be used to prevent the worst crimes.

It's definitely NOT the thin end of the wedge."

\- some luddite politician prior to legislation requiring blocking technology

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crdb
For those who think this is addressing a relatively small problem, one of the
major Australian banks analysed [1] the accounts of 1 million of its customers
(1 in 22 Australians) in 2011 and found that 74% of e-commerce by revenue was
cross-border. Three quarters! In some markets, over 90% of the revenue was
from abroad.

It's not just fashion and cosmetics, things like lawn mowers were also getting
imported.

Part of the problem was AUD appreciation which put the MSRP of most things a
good 50% above the rest of the world. Coupled with high costs in Australia
(due to tight labour legislation which helps sustain an egalitarian culture),
no Australian retailer could compete. The AUD has weakened substantially since
then so I wonder if the picture has changed enough to make GST matter.

Charging GST might help a little bit, but the issue is FX, high local costs,
and relatively cheap international shipping. For example, ASOS offers free
international shipping so long as you are ready to wait 4 weeks. This is fine
with most customers who prefer buying the same jeans for $60 and wait to
paying twice as much and having them instantly. They employ only a handful of
people in Australia to manage inbound shipments and customs, but it is (was, 3
years ago when I last looked) a significant chunk of their global profits.

That being said, protectionism didn't work out for the Australian car
industry.

[1]
[http://globalmarketsresearch.commbank.com.au/ReportWeb/d13de...](http://globalmarketsresearch.commbank.com.au/ReportWeb/d13debf3b-701e335e5cad/Onlineretaildata-28-Jul-2011-0008-1.pdf)

~~~
broodbucket
FYI your link got messed up by a space, might want to edit it

~~~
crdb
Thanks, done.

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King-Aaron
Correction: Australian government will attempt to restrict IP addresses of
certain sellers when a large, party-supporting local retailer submits a
complaint about them. (I.E. Gerry Harvey)

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bootload
_" New regulations, announced in 2015 and to be implemented from July 2017,
require overseas businesses with an Australian annual turnover of $75,000 or
more to collect GST on all goods, including those under the current $1000 low-
value threshold "_

It's not the fact the Aus government collecting tax is bad, remember Apple,
Google and a slew of other companies are recognised corporate tax cheats, it's
the fact this legislation can be used as a tool to ^ban^ more of the Internet.

~~~
tnicks
> _"...remember Apple, Google and a slew of other companies are recognised
> corporate tax cheats..."_

I fail to see how one can make this assertion without any citations. Apple has
paid over 19B in tax expenses in 2015 [1]. Alphabet(Google) has paid over
3B[2]. No other company I could find came remotely close to Apple's level. For
some perspective, their tax expense is greater than 44% of the world's
countries GDPs[3]. If one reads the definition of _tax cheat_ at
Investopedia[4] it does not apply to Apple nor Google.

You may not like those companies and you may not believe that they pay enough
in taxes but this does not connote that they are "recognized tax cheats".

[1][https://finance.yahoo.com/quote/AAPL/financials?p=AAPL](https://finance.yahoo.com/quote/AAPL/financials?p=AAPL)
[2][https://finance.yahoo.com/quote/GOOG/financials?p=GOOG](https://finance.yahoo.com/quote/GOOG/financials?p=GOOG)
[3][https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(nominal\))
[4][http://www.investopedia.com/terms/t/tax-
cheat.asp](http://www.investopedia.com/terms/t/tax-cheat.asp)

~~~
imron
I'm sure the GP was talking in reference to the amount of tax those companies
paid on their Australian business.

See for example here: [http://www.smh.com.au/business/the-
economy/apples-85-million...](http://www.smh.com.au/business/the-
economy/apples-85-million-tax-bill-is-a-fraction-of-its-almost-8-billion-
revenue-20160126-gmej0z.html)

Google, Microsoft and others are in a similar position.

[https://www.theguardian.com/australia-
news/2015/apr/08/googl...](https://www.theguardian.com/australia-
news/2015/apr/08/google-apple-and-microsoft-defend-tax-set-up-that-shifts-
revenue-offshore)

------
cyberferret
They want companies in every other country outside of Australia to collect and
remit tax to the Australian Tax Office?? Good luck with that!

Imagine trying to get Sven's Online Yak-hair Mocassins in Norway to complete a
quarterly BAS.

Surprised they are not focusing on LOCAL Aussie ecommerce sites that don't
collect and remit GST for local sales.

~~~
hirsin
If Sven manages to sell $75,000 AUD worth of moccasins to Australians, he
might reasonably have the resources to collect the taxes as well.

That's not to say he will, but I feel that selecting 75k as a threshold falls
on the side of "it's cheaper to comply", which is the right move.

~~~
bpodgursky
$75,000 gross retail, at a usually far smaller profit margin -- call it $7500.

Do you seriously expect someone to hire a tax attorney for Australia over that
much income? That's the price of walking into the door.

~~~
wbl
If they are smart they will make the tax so simple you don't need an attorney:
just slap a decimal point in the right place and send a check to an easy to
find address.

~~~
imron
Let me put it like this. The ATO's website for submitting quarterly tax
statements requires a Java Applet to perform verification with a private key
stored on your machine.

Despite Java's "Write Once, Run Everywhere" promise, every single update of my
OS (mac) and/or browser would cause issues because the OS and browsers are
actively trying to prevent you from running Java Applets for security reasons.

Which I understand, and also support, but it means that I'd be locked out of
the site and had to spend a couple of hours hunting around forums posts trying
to find a solution - and sometimes one wouldn't even exist.

My current solution to this problem is to have a locked down, non-updating
Windows VM that I use exclusively for filing my business activity statements.

It's a pain for me to do it. I don't think it's going to be any easier for
Sven.

------
tempestn
Here in Canada, anything that exceeds the low value item exemption (which is
ridiculously low at $20) gets taxed at the border when it enters the country.
This is a pain, yes, but at least you're still able to buy whatever overseas
goods you want. The Australian solution seems.. illogical at best. Savvy
buyers can just work around the blocks, but others will be left without goods
that they could have otherwise purchased, albeit with a bit of a delay.

Obviously the goal is to coerce sites into collecting the taxes to keep the
business, but surely that could be done within the existing system, without
bringing internet censorship into it. For instance, they could de-prioritize
processing of shipments where taxes weren't collected, giving companies an
incentive to comply (since they would have an advantage in shipping time over
competitors who don't). This approach seems unnecessarily heavy-handed.

------
doctorwho
Australian use of VPNs is about to skyrocket!

~~~
imron
Nah, it's already pretty high thanks to Netflix and similar.

------
adrianratnapala
Can someone who knows about tax law explain what the scope of the GST is with
regards to imports? I.e. how big of a deal is this?

Does everyone who sells items to Australian purchasers have to pay GST? Or is
the GST only applied for some corner cases where, (for example) Australians
sell stuff to each other, but involve an oversees leg in the deal?

(Edit: this is of course a seperate issue from how blocking capabilities can
be abused in future...)

~~~
caf
The _current_ situation is that you are required to register and remit GST if
you make AUD$75,000 worth of GST-taxable supplies "connected with Australia".
This fairly lengthy ruling speaks to what falls under that term:
[https://www.ato.gov.au/law/view/document?docid=GST/GSTR20003...](https://www.ato.gov.au/law/view/document?docid=GST/GSTR200031/NAT/ATO/00001)

Currently items under AUD$1000 which aren't alcohol or "bulk orders" are "low-
value imports" and aren't taxed, so they don't count in the $75,000 threshold.
This is one of the things that's changing in July 2017 - the removal of the
low-value threshold.

In the current system, if you directly ship goods from outside Australia to
the end-customer in Australia it is deemed that the _customer_ is the one
that's importing it, and therefore the one responsible for the GST (they're
supposed to pay it to Customs). It's not a "supply connected with Australia"
and doesn't count in the $75,000 threshold.

It _sounds_ like this last provision is changing as well but it's actually
hard to find the details on this. There's just high-level descriptions like
[http://www.budget.gov.au/2016-17/content/bp2/html/bp2_revenu...](http://www.budget.gov.au/2016-17/content/bp2/html/bp2_revenue-10.htm)
.

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feralmoan
Australia takes Howards doctrine of 'punching above it's weight' and without
any meaningful leadership just punches itself in the face. Seriously Straya,
why are you punching yourself? Why are you punching yourself? HAHAHAH... Why
are you punching yourself? Why are you punching yourself?

~~~
shermanyo
As a citizen watching those in charge, it feels more like I'm the embarrassed
child at a bbq watching our drunk dad slur something racist about the
neighbours, take a swing at his brother in law for something he misheard, trip
over his thongs and spill beer all over his pants.

~~~
feralmoan
Australians have mastered the art of crab mentality. Dodge those pincers.

------
ramblenode
Given how large the e-commerce market is and how high the sales tax is, I'm
sure a substantial black market will form around avoiding this tax. Privacy
concerns may not be enough to motivate people to use VPNs or proxies but hit
their pocketbooks and I'm sure the use of these tools will take off.

The black market infrastructure that shields the origin of these goods will
also shield fraudulent merchants from consumer challenges and regulators. I
imagine it will also give cover to narcotics and other illegal goods by
conflating the purchasing behavior of law-abiding and criminal buyers and also
the behavior of merchants.

------
snovv_crash
What about just charging customs fees like everyone else in the world?

~~~
retrogradeorbit
They originally were doing that but the volume of imports was so high they
couldn't deal with the processing back log. Then they moved to only charging
GST on imports over $1000 AUD. That actually worked really well. Then they got
greedy. And were pushed by powerful retail owners to do something.

The whole thing is ridiculous because there are far bigger fish escaping the
frying pan that they just ignore. Like the whole negative gearing property
issue. They don't touch that massive tax hole because the individual
politicians themselves are making huge coin off it.

------
mkj
It seems unlikely it'd actually get implemented.

~~~
Untit1ed
That's what we thought about metadata retention

------
leohutson
Would be smarter to just remove GST from goods that are commonly imported
altogether.

Could offset the lost revenue with non-renewable energy taxes, land value
taxes, capital gains taxes.

~~~
tempestn
It's my understanding that a sales tax is one of the better revenue sources
from a fiscal policy perspective. Its primary downside is the difficulty of
collection, but otherwise the incentives are good. On the other hand,
something like a capital gains tax discourages investment. (Not saying that
shouldn't exist, just that it's not clear it's superior to a GST.)

------
Mao_Zedang
Australian companies when selling to the EU have to collect and pay VAT. This
seem only fair that those same EU retailers now must collect and pay GST?

It would make more sense if they just banned the stores ability to remit funds
via the VISA/Mastercard (etc) networks.

~~~
kbart
_" Australian companies when selling to the EU have to collect and pay VAT."_

Unless there's a special deal between Aus and EU I've never heard of, then no.
If you bought goods from outside EU, you pay VAT and import taxes (if
applicable) at the customs.

 _" If you buy goods for the purposes of your business from a supplier based
outside the EU, you must generally pay VAT at the point of import"_[1]

1\. [http://europa.eu/youreurope/business/vat-customs/cross-
borde...](http://europa.eu/youreurope/business/vat-customs/cross-
border/index_en.htm)

~~~
Mao_Zedang
Consumers arent businesses.

You are wrong.

[https://quaderno.io/blog/what-you-must-know-about-vat-if-
you...](https://quaderno.io/blog/what-you-must-know-about-vat-if-you-have-
customers-in-europe/)

~~~
kbart
No, your link only talks about _digital goods_ , that are exemptions. Of
course, you can't pay VAT for digital goods (subscriptions, ebooks, mp3 etc.)
on arrival, because there's no shipping and thus customs are avoided, so VAT
must be included in sale's price.

Here's information regarding buying from non-EU countries for individuals[1]
and it clearly states: _" As soon as you buy a product from a non-EU country,
then effectively you become an importer and become liable to Customs and
Excise Duty as well as Value Added Tax (VAT) payments."_

1\. [https://ec.europa.eu/taxation_customs/individuals/buying-
goo...](https://ec.europa.eu/taxation_customs/individuals/buying-goods-
services-online-personal-use/buying-goods/buying-goods-online-coming-from-a-
noneu-union-country_en)

