$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.



    One term government. Kick this mob out in the coming elections mandate the opposition to repeal this legislation.

      Let this be a lesson for everyone. The Liberal party doesn't care about the average Australians.

    They will probably use the UK model.
    If a parcel has an email address on the address label customer is auto emailed an invoice with tax amount. End user pays online and then parcel is delivered. They also have courier services who carry eftpos machines to pay tax at delivery. Other wise letter is sent and one tax is paid item gets delivered. In UK it does not matter of the item is marked as a gift there tax would still apply

    I see the big business creating a side business in mail forwarding (Free with your blabla subscription). Everything you buy is now a gift. The government can't go for a company that has zero income. Problem solved.. ?

    I agree with the earlier statement, this'll fall to its knees like a single mother on a night out.

    Doesn't matter. I use Digital Rev based in Hong Kong for my camera equipment purchases. Even with the 10% its still way cheaper than teds cameras and digital camera warehouse and camera house. Example Teds Camera has the Nikon D750 at 2500 . Digital Rev at 2099. Plus the 10% is 2300 still cheaper than Teds Camera
    SO will customs have to intercept all parcels coming through ? I'll just get digital rev to put it in a plain box and mark it gift. If customs have so much time to check 1000s of parcels then good on them.

    Last edited 22/08/15 2:44 pm

      Fuck man, I worked at Camerahouse Leederville for one day. They are absolute and total scum. None of them even do photography. The way they treated their staff was deplorable and all they spoke about all day is the "great" price markups. They were taking the dodgy used car salesman trope to a whole new level.

      To top that off they didn't even pay me for my time (despite the fact I spent the entirety of my first day cleaning their filthy store room and organising the floor).

      The manager was gobsmacked when I told him I wouldn't be continuing because the "shirt doesn't suit my eye colour".

      I can never take "local family owned business" seriously after working in retail. Here is a tip: If they are wearing a button up collared shirt, run.

      Last edited 23/08/15 2:30 am

        I have been to Camera House Midland Gate a couple times. Bought a lens there because it was only 100 bucks more than digital rev at the the time and I needed it right away.Seemed ok. Quite. talkative and recommended me a lexar pro sd card less than half the price of the sandisk cards Very dependent on the franchise owner I think/.

    Gerry Harvey finally got his wish

      But Gerry thinks this will save his company and he wont have to lift a finger... cant wait for the backfire

      And his response: "Crud! I didn't think they'd do that! What am I going to complain about now?"

    It won't only be an 10% increase in prices.

    Look up "AQIS" (quarantine inspection) fees. Any item over $1000 at the moment pays $16.50 AQIS fee.

    This change makes work and fake jobs for quarantine officers to ruffle through our personal items.

    Its about saving jobs, cry me a river you whingepool have a work around babies. Omg the govt is making me pay 10% more! Rofl lol copter!

      Really! these jobs you want to save are the some ones that gouge prices and give no choices in product and couldn't give a rats about customer service... not whinging cause it will still be cheaper buying online

    Guess the Libs and Harvey Norman missed the memo that we live in the 21st century now...

    Correct me if it's changed, but the last time i bought software from Adobe or iTunes they didn't even charge me GST (it was different for a recent hardware purchase) so I would like to know;
    If you buy something from one of the big guys that seem to pay little tax do they charge GST in Australia now? Did you get charged a GST component?

    Hmm ten percent more expensive to buy, still 90% plus cheaper than buying in Australia?
    The only winner here is the Tax dept.

      And even then the Tax Department is likely to lose out as despite Hockey's claims it will cost more to collect than the revenue it will generate.

    This kinda stinks of getting a groundswell of support for the TPP. They will change the threshold to zero, people will bitch and moan, and then they will turn around and say "Well, if we had a full free trade agreement we would be able to remove at least some of this". Then we are royally fucked AGAIN...

    The sooner Gerry Harvey karks it, the better this country will be

    While we are all on the subject of GST and Online Shopping etc etc. It's about time somebody fixed the added Australia tax on overseas goods, for example Apple devices. $200 US vs $1000 AU for an iPhone.

      $199 when it is on a 2 year contract etc. The cheapest an iPhone 6 is unlocked and with no plan is $650 USD.

      But good try.

      Those prices are in no way comparable.
      The US price is not for the phone outright, the Australian one is.

      The US price is for a phone on contract with one of their major telcos (and there usually is a certain level or type of plan you must purchase for a set amount of time for you to get that price).

      That said, the prices in Australia are still higher for iphones even if you try and get a US phone outright and take into account exchange rates)

    If online shopping gives you that little satisfaction per week/month (retail therapy) well prepare to have that taken away from you. Online shopping was expensive even when we were in parody with the US dollar. It's still expensive now. I'm sick of it. Australia is getting ripped off.

    If PayPal doesn't want to lose revenue due to lost sales, then they'll add 10% GST at checkout. Either that of there will be a lot of 'gifts' or "warranty replacement part" etc.

    I wonder how much it will cost the government to implement that? I guess at least it creates employment in the public sector.

    As small business owner who pays all taxes in Australia totally in favor introducing GST on online imports as importer we have to pay GST on goods and fright on all imports plus customs clearance fee and custom duty depending on product and country we importing from. Current duty+GST free arrangements for goods under $1000 is exporting Aus jobs oversees. Beside GST and import duty need to introduce customs clearance fee this will cover the cost monitoring and controlling online imports and help to rise taxes.This will create more Au jobs.

    And how will they treat goods Australian goods that are exported overseas? If your going to charge 10% on every imported goods, goods that are being exported should be cleared from GST because other country is charging GST on those goods as well. Otherwise, it sounds like this to me: Since the company is getting double GST charged, they will pass the cost to end-consumers. Which at the end sounds to me like: Dont buy goods overseas or imported goods because they will be a lot more expensive ---> hence, ultimately, dont trade

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