I have purchased some O/seas items where I have the GST added on the purchase. I don’t know if they then funnel that money to the Australian Government but it certainly was collected at sale, beyond that not my problem.
Paypal certainly can add the 10% to a non Australian transaction and any overseas travel can easily be proven for reimbursement/non imposition of fees if levied by Credit Cards or Banks eg Travel Documents, Passport.
I would add that before you travel you should be advising both your CC company and or bank /s re your travel dates to avoid issues arising from unexpected transactions from overseas that your finance providers might block and also lock accounts for.
A few ideas have been floated but remember government usually ‘solves’ problems with the bluntest possible sledge hammer approach
In this case they are trying to grab the bottom dollars of GST (that might add up or not compared to the repercussions and costs of implementation) but they obviously are not concerned what the reduction in product choice and access to products not brought into Australia will do to so many of us.
Unfortunately Tweedledee and Tweedledum behave similarly when in government, as they behave similarly when in opposition.
I buy my reading glasses from China - $1.99 landed. Can’t imagine any reality where it would make sense to try catching the 20c GST … oh, wait, I did say reality …
I think the whole thing is somewhat farcical. We have on four way tussle, a Government trying to capture the last cent of a GST component at the cost of some dollars per that cent. Then we have the agents of the buyers & sellers eg EBay, and Amazon who say they don’t want to collect as they don’t have to now even for amounts >$1,000 and that they just enable two parties to agree to buy and sell, we have the overseas sellers whose countries do not impose GST and have different and sovereign tax laws to ours and finally the buyers who would in most cases happily pay an extra 10% just to get the product because it normally works out at least 50% cheaper to buy online even incorporating postage/shipping.
Part of the stupidity is that they aren’t saying GST must be imposed by the seller on postage/shipping as well, as currently postage/shipping is GST inclusive within Australia, or are they going to hit the buyer with that in the future. This Government is just greedy for income and want no cost of that greed to be borne by them. Just imagine being hit up for GST for the postage on the letter sent by your friend/relative who is overseas, what outcry there would be then.
Now most buyers might agree to the 10% collection as long as that collection didn’t increase the price by much more than the 10% eg 10.5% to allow administration, but the Government knows that it would cost them much more to collect than they would receive.
So how do they collect the GST now on items that exceed the $1,000 threshold?
Why don’t they put that process in place for the less than $1,000 items? It works now so should continue to work for lesser amounts but the cost of recovery climbs steeply I am sure as the amounts become trivial.
EBay and Amazon don’t collect that GST for >$1,000 now so why the change in procedure to make them the collectors for amounts <$1,000?
I think if they really want to efficiently capture GST they could drop the threshold to a lesser amount but not for every sale eg make the threshold $500 and maintain the current system of collection. Nothing would need to change and the Government might receive more GST collection.
OT but has some relevance. I am in the EU now and it is epic how may US web sites are geoblocking the entire EU because of the recent EU privacy laws. Businesses first response is to protect themselves. In that regard business will prioritise their own protection from prosecution . (Funny our banks did not see it that way - maybe there was a protection racket, yet to be exposed?)
Since tax laws are the ultimate government weapons (tool?) businesses are not going to screw around with them. (all the US ever got Al Capone for were tax things!)
We are seen as acceptable collateral damage by government in its quest to protect uncompetitive retail and get a few dollars of GST, and as too much risk (at least for now) by the overseas seller community. Where the equilibrium will settle remains in play.
Update: Amazon has clarified that Australian users will not need to use a VPN to access its US site from July 1. Australian customers will still be able to purchase from the US site but Amazon will only ship to US addresses.
edit: amazon (as other US on-line retailers) will apply sales tax for that levied at the delivery address if the company has a bricks and mortar presence in that US state…
I amuse myself sometimes how strange things seem, and that I didn’t see it coming.
On eBay, searching for some of my favourite items, and one came up, a particularly rare item which though damaged was of interest. It was in the UK. The seller had minimal feedback, a few dozen respondents, which suggested to me they were an individual user and not ‘a shop’ as such.
There was a buy it now - so I added to cart and went to checkout to see the damage. Seemed odd that GST was applicable, seemingly to the whole purchase amount not just any service eBay provided, although arguably the vendor pays for the service, so even stranger. I went back and checked the ad, and noticed the item was damaged - so removed it from the cart and abandoned the purchase.
Of course in Australia it would be the requirement of the seller to pay GST transparently if they earn more than the threshold, so why should I pay GST to some guy who has sold 30 items in the last 10 years on eBay just because he’s in the UK.
Another curious thing with the UK is the increasing use of “Global Shipping Program” which seems to mask some of this and call it “import duties”, none of which you can quantify until checkout.
Furthermore, we now pay GST on postage of an item from overseas (this has been the case with >1k$ purchases in the past, if you don’t structure it correctly - I’ve always paid postage as a separate invoice for this reason, so the declaration was always goods only). I’d be guessing in the UK postage attracts VAT, and probably some kind of tax in most places - then we pay GST on it here was well.
I’m struggling with the idea that taxing overseas purchases is just too hard to do right, so they do it in a blanket fashion anyway and simply don’t care … which shouldn’t surprise anyone.
I suspect the eBay platform is seen as the seller and not the person holding and disposing (seller defined by eBay) of the goods on eBay.
Alternatively, the goods are seen as on consignment to eBay rather than being sold by individual sellers. I bit like Bunnings where it may have a product on consignment which only sells low value each year, but GST is still paid to Bunnings even thought the underlying seller wouldn’t usually qualify for GST status if they sold it independent of Bunnings.
The second hand issue is also interesting…as I understand that private second hand sales are GST exempt, if one is not registered for GST. I suspect that if this exemption applied to eBay purchases, then all of a sudden all eBay goods would suddenly become second hand.
It is casting a blanket over everything to prevent loopholes being exploited.
eBay is also regustered for GST, not tye individual 'sellers’on the platform. I imagine that getting each individual seller to register for GST or claim exemption status would be an administering nightmare.
(hopefully satire) Are you implying you were not invited to the casual dinners attended by Gerry Harvey, his mates, and many of the government ministers responsible? That could explain why it seems mystical. It is not only easy this way but makes the price of importing as high as they can as opaquely and simply as they can. Gerry and his mates could have been thankful and may have conveyed their donations in appreciation.(/hopefully satire)
@phb explanation is totally plausible but it is a pretty ugly regime that does seem quite unfair even as taxation goes, doesn’t it.
Is it possible to claim back from the ATO gst as a buyer where the seller has added it in correctly? Or is this purely a legal matter between the buyer and seller?
If it was important enough I’d be asking for a stat dec from the seller to verify the the goods were a private sale and used/second hand. And offer only the amount without gst. That businesses such as EBay are only an agent does not legally entitle them to the gst amount on the full value of every sale. Arguably there is gst on the service if it is deemed to have been delivered as a service in Australia, but not on the overseas component?
No doubt the cost of a High Court challenge on a $50 purchase is all that stands between the right answers and a $5 gst refund?
I suspect that bIth the seller and buyer would need a ABN and be registered for GST as such would be needed to claim back the GST. Like would occur if the purchase was made in Australia with an Australian seller.
My understanding is not all second hand goods are GST exempt. I suspect that the ATO would consider eBay being the seller and would possibly also consider that the sale was not private, but through a multinational company… .thus potentially triggering GST.
From recollection, private selling of GST was exempt as the ATO considered the item, when new, was subject to GST or sales tax and therefore applying GST again may meen double dipping, especially when the private seller couldn’t claim the GST back. If a item is bought second hand from overseas, then the item in the 0ast has not been subject to Australian GST/taxes. They possibly would argue applying GST on such items would not be double dipping.
What possibly will happen is Australian second hand goods seller will move to other platforms where GST may not be payable for private sales. This includes Gumtree and such like.
