A new law applying GST to international sales of services and digital products will apply in Australia from July 1 next year.
The new tax rules will apply to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales.
The changes will relate to a broad range of products, including streaming or downloading of movies, music, apps, games and e-books, as well as services such as architectural or legal services. The new law applies very broadly to sales of anything except non-digital goods or real property.
A company selling digital products or services to Australian consumers, that meets the registration turnover threshold of more than $A75,000 in annual sales, will be required to register for, report and pay GST on sales made from July 1, 2017.
For sales made through an electronic distribution platform, for example an app store, the platform operator is responsible for registering, reporting and paying the GST. The ATO says a simplified system will be implemented for businesses to register electronically, lodge and pay the GST. This will be available via the ATO website from April 1, 2017.
Under this system, the ATO says businesses:
• will be able to register electronically with minimal proof of identity
• can lodge and pay GST quarterly
• do not need to provide a tax invoice or adjustment note to your customers are not able to claim tax credits.