Source : PC Mag Australia
Author : Alex Kidman
Business Insider reports on the move, which will be part of tomorrow night’s Federal Budget.
The plan would be to charge a ten per cent GST levy on digital goods and services sold in Australia by companies based overseas, including music, video and computer games.
It’s entirely unclear how the Australian government could compel companies to include a GST component, or enforce strict reporting on such a requirement were it to go ahead, with Hockey quoted as saying that it’s first of its kind legislation in the world.
While it’s been dubbed the “Netflix tax” due to Netflix’s entirely legal GST avoidance strategy, the scope of such a move could be very wide indeed, encompassing services offering digital games such as Steam or Good Old Games or music providers such as Spotify or Rdio.
Gizmodo quotes Hockey as stating that it would specifically target companies offering digital goods:
“What we’re doing is going to digital providers overseas and saying ‘can you apply the GST to the products you provide into Australia?’. They [the tech companies] are agreeable to it. It’s not their profits [being taxed]. It’s a tax collected and they remit it back to the country where that [consumption tax] occurs.”
It’s also being widely tipped that a separate budget measure may seek to regain tax being shifted by large multinationals, possibly including technology firms with punitive fines for those who do not comply.