$1000 GST-Free Threshold Abolished: Overseas Online Shopping To Become 10% More Expensive

A consensus between state and federal treasurers today during tax reform talks means that all purchases made overseas -- through popular online shopping websites like Amazon, Book Depository and NewEgg, as well as any traditional methods like mail order -- will incur a 10 per cent GST charge, abolishing the existing $1000 threshold.

Opinion: Australian Government's 'Parcel Tax' Won't Help Aussie Businesses Or Consumers

The Treasurer, Joe Hockey, says that the agreement means all overseas purchases will be taxed at the full 10 per cent GST rate, as of July 1, 2017. At the moment, no information on the enforcement or revenue collection of the GST component of overseas purchases is available; today's agreement is likely in principle rather than in any exhaustive detail.

Hockey said of the tax at a press conference this afternoon that it would level the playing field for retailers in Australia:

Treasurers agreed to apply the GST to offshore sales into the Australian market. This is a significant initiative. From the 1 July, 2017, the GST will be applied to all products and service sold by vendors into Australia. This will deliver competitive neutrality for Australian businesses, and ensure fair and equal treatment of goods and services. If goods and services would have the GST applied in Australia, then the same should apply for goods [bought and imported] from overseas.

A start date of almost two years from now gives both states and Federal Government time to design and implement a scheme. It is still unclear what costs would be sunk in creating a program to monitor the importation of goods from overseas, and how such a system would be enforced in contacting consumers and demanding payment of the tax once a parcel has reached the border and has been marked for the additional fee.

Hockey says that there's a lot of work to be done to implement the scheme, but adds that if the Government works out a way to implement the scheme earlier, it will be done. You heard right: the July 2017 date could be moved forward.

Meanwhile, Hockey added that taxation officials will travel around the world to get companies (like Amazon, Netflix, Facebook) to register for GST.

Hockey said that abolishing the GST-free threshold was the right way forward for the treatment of overseas purchases, rather than lowering it from $1000 to another arbitrary amount. The Productivity Commission had previously ruled that lowering it would cost more money to enforce than it would collect, which Hockey today slammed as a "ridiculous" suggestion. Basically, it's cheaper to just charge everyone than a select number of individuals.

Quoted in the meeting, federal treasurer Joe Hockey told the assembled state treasurers that "it won't be about policing the consumers, it will be about policing the vendors overseas" -- but those vendors will pass the costs directly on to consumers, whether through an additional fee at the checkout level or at the point of a parcel's entry into Australia in the case of less regulated international online stores such as eBay.



    What a joke. The govt has no idea how the system works. Packages will get held up for days waiting for gst to be paid by Us. Australasian post and the express companies won't just collect it for free. When productivity commission did their study they said it would be to expensive to collect to outweigh revenue. The government doesn't understand how goods are cleared customs. If you import over the threshold now, a broker has to do an entry. So are all packages going to need a broker? Where will all these brokers come from, when the industry is so dry, and the process to become a broker is so hard. Get ready for big delays! It will cost them the election as this is just another tax on mums and dads. The reason people buy online is that the stores have no variety, and nit wits like Harvey Norman, charge you 200% mark up. He is a greedy man with no idea. By the way, he imports himself under the threshold!

    Oh great, another decision that only favours the interests of the greedy (our Government). How about try and fix our economy which is forcing me to pay an extra AUD$15-35, with this 10% increase I'm looking at around an extra $23 on top of that which puts my regular server payment at around AUD$194 instead of AUD$135.

    Why do you morons (Liberal) keep picking on the little guy, how about going after the big guys.

    Does this happen for any other countries at the moment? How do they handler it?

      USA taxes any item you buy overseas and bring back receipt or no receipt you have ti prove you bought it in the USA . I was watching international border control and they were interrogating this Chinese couple over a couple of cell phones . The phones had made in china on them not made in a NAFTA country. If you get caught with any item at customs and you are USA or Canada citizen and your item says made in China or anywhere else you pay tax on it unless you can prove you purchased in a NAFTA country.

    How is the government going to get all the vendors on eBay to charge an extra 10 percent. There's millions of them and as usual they're going to try undercut each other so I don't see this as a problem. Besides, Apple and the rest of them charge the extra 10 percent but they don't bother giving it back to the government. This is a farce.

    This was always going to happen and is a necessary protection measure for Australian retailers.

      even with the 10% its still cheaper to shop over seas. Teds Cameras for example charges miles over the 10% . You're dumb if you buy from them,

      Last edited 22/08/15 2:54 pm

    Certain price gouging retailers are going to need the government to apply a lot more than 10% to help them out.

    I can't see it making much difference except to employ a lot more people in customs (sorry ... Border Force!!!).

    Brilliant! My Ashley Madison account already costs me a fortune.

    Another new Tax from the PM who promised before the elections "No new taxes"

      Er, no. It's not a new tax. GST was just not applied to goods imported that were over 1,000 AUD.

      Last edited 22/08/15 7:46 am

        good ol tony Specifically said

        ""No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS,"

        Lowering the threshold is a change to the GST

          Gillard also promised there would be no Carbon Tax under a government she led.

          Abbott was an idiot with that promise banner. Undermined the avenues his own colleges would have to explore to repair the issues Labor left behind.

          Seriously, if you want to have a go at Abbott for "breaking promises", then you'll have to look at all the other MPs on both sides.

          Unless you how get paid to do so, don't waste your time. All politicians lie, not just Abbott.

            Lol, im not deny labor has ever lied. But as Abbott is currently in power, I will direct it all at him. If labor is in power and they break a promise, i would do the same.

              My apologies. I've come across so many people who are quick to brand Abbott a liar yet either don't remember or choose to forget the promises Gillard broke it has become a habit.

                Im a strong labor supporter, but i dont deny that labor tells fibs, All pollies do it :P

            Name one other Gillard lie?
            Tony's include
            No cuts to education
            No cuts to ABC
            No cuts to SBS
            No new taxes
            No GST
            As well as coming to the elections with a secret agenda to charge to see doctors, shut down the renewable industry, displace Aboriginal communities, chop down Tasmannia world heretage forests...
            The list of lies, broken promises and deceptions are in their hundreds.

    simple australia ppl get screwed like always we already pay shitloads of cash on crap

    Meanwhile, according to a recent tax enquiry the Apples and Googles of the world that operate in Australia literally make billions tax free and get completely ignored. Good on you Hockey, you're a genius. Go suck a dick. Or a Harvey (same thing).

    SO we pay 10%
    We still save 15%, online shoppers Win again.
    the 25-50% Australia Tax has nothing to do with GST and storefronts, more to do with Price Gouging multi-level corporate distribution chains.
    (The seller in the USA/UK/Europe/China also makes a profit.)

    Collecting is easy, All packages at customs are assessed for value and not released untill the GST is paid, no matter IF there is already VAT/GST paid in the originating country.

    I thought Australia was not party to double taxation (Gifts purchased in another country, nominally have GST/VAT applied at purchase.

    Some GIFTS are already taxed on entry to Australia, any excisable product (Alcohol) isn't released until the approx $70 /L ethanol, is paid. Ignoring that a GIFT has already had legal excise paid when purchased by family and friends. How do I know??

    As an Australian small business owner myself, this is not good for importing goods from overseas vendors as it would mean increasing my prices by 10% as this is no incentive for consumers and will in-fact damage the retail economy. The reason the vast majority of people buy overseas is because products are simply better and more adequate than 'local' products within Australia when looking at the fashion industry for example and electronics. This can be voided by lowering the declared value to near nothing or simply marking as gift. If the business overseas will be willing to do this for you. Meanwhile in China, the top income earner only pays 10% tax, and their government run postage service costs businesses near nothing to send a heavy item overseas. So this new policy will affect all small businesses in the retail sector who import and export, cheers Liberal government once again you f***wits!

    What a self deluded load of bullshit.

    A certain pair of Nikes from Footlocker here is $200 yet online is about $80 USD. Even with the $ conversion, GST and shipping, they still end up being $60 cheaper.

    Local retailers are just a bunch of deluded wankers. Their stuff is too expensive and they refuse to admit it.

    Guys the administration fee is at least $40.20 + 10%.
    If your item is $1 it will be $1 + $0.10 (GST) and $40.20 (Import Processing Charge)

    So what originally cost 1 dollar is now 41.10 at 4100% increase.

      Still cheaper than what those greasy collared shirt fuckwits in Harvey Norman will charge you in commision.

    Amazon not only already have the capability to implement the GST they already do today as required under Australian law. Add over $1000 into the cart (Be it single item of multiple items that combined cost over $1000) and they add 10% GST to the total and already pay that to the government.

    ...anytime the Government uses the term 'fairer', you know it's going to bite you in the arse!

      The actually print a little * in the same colour as the background with a hidden disclaimer.

      *Fairer. For our party donors, but not for peasants.

    here is the solution.
    use shipping redirect service. it wont be from the vendor! so no gst.

    Quoted in the meeting, federal treasurer Joe Hockey told the assembled state treasurers that “it won’t be about policing the consumers, it will be about policing the vendors overseas”

    Everyone should be terrified how much stupidity is in that statement, from this countries f*cking TREASURER.

    Last edited 22/08/15 12:18 am

      How the f*** they going to do that ? LOL Hockey you are a retard

    I think upon checkout there'll be an extra 10% tax added to the total, and the retailer will have to pass it on (Although we all know most online retailers wont pass it on)

    If it is like Canada, (everything coming from overseas incurs a 13% import tax of what the private company believes the contents are worth PLUS a $25 - $35 fee for the private company) Then it wont be long before Australians are finding loop holes to get around paying this bullsh*t (Like having the online retailer selecting "Gift" on the customs declaration).

    Either way f*ck this lying sack of sh*t Government body the consensus was stupid enough to elect. It'd be nice if a governing body actually represented the people instead of itself. its 2015 for f*ck's sake...

    Way to go Joke Hockey, now every other foreign company selling digital goods is going to be your own little personal tax collector for the ATO. They can't claim back the GST, so they are essentially going to be doing this for free.

    Think of how many sales Steam is going to lose from Australia because the admin fee will literally cost more than the game itself or if the game is full price, you can expect it to cost somewhere in the vicinity of 20% more.

    Not a clever cookie.

    Last edited 22/08/15 8:04 am

    Go harvey go harvey go ... f%^& yourself.

    Undoubtedly he had a big part in this (after all government, especially libs, are just lackeys for big companies). I wonder if there will be be a backlash against the companies lobbying for this, and make them bend over for a change, there is only one thing they understand, profits, i haven't bought from Harvey Norman in years, and now i think ill just buy online anyway.

      I never buy from Harvey Norman. They are always more expensive for everything

        Always is a bit of an exaggeration, sometimes on their sales they have quite competitive prices.

        And you should never pay the sticker price on a non sale item.

        Last edited 24/08/15 8:37 am

    This has not been thought out (if at all). How do they intend enforcing it and by who, when, where, and again How? If I purchase something eg. a computer part from Hong Kong. I use a VPN and Paypal and its sent by post as "sample". Does customs check every package and the postman collects the GST at my door. Get real - this will never work or it will have so many holes in it that it will cost far more than it gets in. Then what about all those "Big Australian" companies who have overseas call centres. Are they going to be hit by 10% GST on this service - Not likely. The way they should be thinking is to apply a GST on all overseas transactions using a credit/debit system. This would plug the overseas tax haven loop-holes in the system. That would be easier to administer and bring in the greatest tax than what they expect here. I predict this is just another "Smoke and Mirrors" trick to raise the GST percentage rather than any serious attempt.

    And now it is, meaning there is now tax on items under 1000, sounds like new tax to me.

    So we will be paying two lots of sales tax. From the country of origin and our own GST. Will overseas customers who purchase Australian products online be subject to two taxes?
    Another broken promise from our inglorious government. No changes to the GST.

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