Press Room

August 31, 2018

From the United Kingdom: Harsher Penalties for Non-Compliance with Goods and Services Tax (GST) Requirements When Importing Services and Digital Products into Australia

Source: Roger Bevan - RBC VAT Limited, a collaborating firm of Andersen Global

From July 1, 2018, low value goods costing AUD 1,000 or less supplied to Australian consumers by retailers located in the UK and all other overseas jurisdictions will be subject to Australian Goods and Services Tax (GST). This change is designed to restore a level playing field for Australian retailers and represents a significant overhaul of the current situation for non-resident businesses.

Using a vendor collection model, the new law will require all overseas retailers, including UK retailers, and online marketplaces (such as Amazon and eBay) whose annual sales to consumers located in Australia are AUD 75,000 or more, to charge GST on sales of low value goods at the time of sale. Businesses that meet the AUD 75,000 registration threshold will need to register for GST, charge GST on relevant sales and remit the GST to the Australian Taxation Office by lodging GST returns. Consequences such as interest, penalties and potential prosecution can apply where businesses do not meet their GST obligations.

For more information about how these new rules may affect you or your clients, please click here to download a comprehensive White Paper about this update.

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