As @phb stated karen, a VPN would allow you to reach the overseas sites that geoblock Australia. Depending on the items you wished to purchase there are businesses operating that will receive and re-ship the items for you. Do your research into them well though as some have patchy reputations and all their services differ. From memory Choice did a comparison of some of the companies in recent times, including what costs and services were available. Some have the option of collating and repacking multiple purchases into the one shipment to save on costs as well.
I have a different view. When the GST was introduced back in 2000, online buying was in its infancy and very much a novelty. Most of the large online retail platforms (eBay, Amazon (in its early days it was principally a bookstore) etc) didn’t really exist.
In 2000, virtually all shopping was done in local brick and mortar stores (with exception of those who travelled and enjoyed a $1000 goods exemption). GST income was easy to regulate and manage.
Before the dotcom crash in the late 1990s, business spruiked that everything would be done online (and why company valutaions became unrealistic). The dotcom crash, indicated that that time, that the promoted endless opportunity of online business may not eventuate to that which had been outlined in the previous years. As a result, the house of cards fell down.
At the same time as the dotcom crash, the government was negotiating/introducing the GST. I expect that the policy makers at that time though that online shopping would not be a big problem for the tax base, and did nothing about it.
Move forward 15-20 years, and it is becoming a problem for the tax base.
There are Australian businesses which have set up shopping platforms specifically to avoid GST on sales, there are multinational companies who have major buying platforms located in other countries to avoid GST, the parcel/freight industry has been largely automated reducing time and costs of international postage etc etc. The has been a drain on the government’s GST revenue base from the every increasing foreign and GST exempt online purchases.
The government has been playing with GST on all imports for many years. Business has only more recently joined the bandwagon as it could be seen as anticompetive (good of less than $1000 imported pay not GST but the same goods purchased in Australia pay GST). A competitive government policy would be to treat all transactions the same…that being what they propose to do.
It is likely that it will still be cheaper to buy many items from foreign platforms, where access to these platforms are readily available.
What is challenging is the cost of implementation of the sub $1000 policy. The costs to collect could be horrendous. It appears that the government are targeting online businesses to collect and pay the GST for good purchased from Australia but sourced overseas. While the costs of collection won’t be any different to that which occurs for business located in Australia, there will still be loop holes as every business in the world won’t be collecting/willing to collect the GST for the Australian Government.
Many foreign located smaller companies say those which, one may deal directly with say for small items which can be readily posted, won’t collect the GST. For example, a small car parts business in Munich won’t be applying Australian GST on a car water pump sent to Australia as they won’t have the means or inclination to collect and pay the tax. They may chose to send the goods to Australia, or chose not to if they are worried about that Australian government taking some sort of action against them (which would be unlikely).
This is possibly where the system could potentially fail. It uses the Australian GST business model where the business pays the tax. This is okay in Australia, but not a good model for foreign based companies of any size. It will probably only suit the big ones while they chose to provide buying platforms for Australians.
I also believe that it is ‘unfair’ (gees I hate that word) to blame Gerry Harvey. We should possibly be blaming the government and senate back in the late 1990s/early 2000s when they were deliberating on the GST. It appears that they could not see far into the future and since them, all governments have been sitting on their hands.
If it was introduced back in 2000 or even 2010, I expect the reaction would be non-existent. I suppose since we (including me) have become use to our online shopping tax-avoidance practices, we are now unhappy with the changes which reduce this avoidance.
I’m still not convinced it’s a good model here in Australia @phb :). An argument I raised with the tax office a few times over the years (and am still to receive a response to) is the point that you are not supposed to pay GST on any component of goods or services that already have GST applied (you shouldn’t pay GST on GST). Catch a taxi and pay by any credit card that is not a Cabcharge and this is EXACTLY what happens. GST is incorporated in what you see on the meter. If you pay by cash you pay exactly what’s on the meter, which already includes the GST. If you pay by credit card though, you are charged an extra percentage of the meter (already containing GST) as a service charge, and then GST is added ON TOP as part of providing said service lol. To me that’s one example of the model as a failure, and if there’s one there is possibly many more.
I also seem to remember the original argument to bring the GST in was to replace all the wholesale/other taxes all the way up the chain to make things simpler, and the end result for the consumer was supposedly going to be cheaper? Can’t be certain as I’m not an accountant but from where I sit it seems the model is a fail there too?
In principal I agree with a user pays system, but in truth we in Australia don’t live in a user pays world. I find it increasingly hard to think good civic thoughts about our tax system when those at the top end of town don’t pay a cent/enough. Don’t tinker with my shopping in attempts to make the rich richer.
Government needs to make more tax? Fine…make the multi-nationals pay their fair share. Stop giving away our national resources for a whisper and a nod. Make the tax rate a flat percentage for all and have no deductions/rebates. When you pay for a tax review actually do what the review says in total, don’t cherry pick it and pay for another review a couple of years later in the hopes it contains results more favourable to your mates lol.
On the anti-competitive argument big Aussie businesses don’t have a leg to stand on lol - they have been acting anti-competitive to their smaller opposition for decades.
This is only supposed to apply to goods with Australian GST. If you buy from overseas, there could be hidden or known sales taxes or VAT/GST. It is likely that one would pay some taxes imposed by the seller’s countries and then that imposed by the Australian govenrment.
Haven’t caught a tax for a while but I recall the last GST is on the service fee only…and the service fee is a percentage of the total fare…if this is the case one is not really paying GST twice on the whole fare but on that proportion of the service fee which was made by the metered amount. Do you have a taxi receipt that you can scan and post so we can look at a more recent example?
Some items aren’t even available in Australia. We still get to pay a premium in postage, which can be huge in some instances, and the burden of collecting GST on lower cost items is huge for small businesses overseas. The Australian government want the revenue, but expect overseas retailers to collect it on their behalf, with no benefit for themselves.
No I don’t collect taxi receipts except when claiming a business expense. The point of how much extra GST you are paying is not relevant, the fact that you are paying GST twice on anything is the relevant point lol.
But let’s break down the numbers of what you are saying if I understand you correctly. I take a trip and the meter shows $55.00 - that means the trip cost $50.00 plus $5.00 GST. If I pay cash I pay $55.00 and have paid one lot of GST - the $5.00. If I pay with Cabcharge I pay $55.00 and have paid one lot of GST - the $5.00 (Cabcharge users don’t cop any extra fees). If I pay with Visa/MC however, I end up paying $57.75 - $50.00 for the trip, $5.00 GST on the trip, and 5% surcharge (was 10% pre 2014) on the total fare which is $2.75. The ability to pay by credit card is a service and therefore the surcharge (service fee) attracts GST, which is incorporated in the 5%.
The original GST on the meter fare is calculated on the $50.00, making the “whole fare” $55.00. The credit card surcharge/service fee is calculated on the “whole fare” ($55.00). This means that the GST component of the 5% surcharge/service fee is ALSO calculated on the “whole fare” of $55.00, not just the GST free component of $50.00, since the GST component of the surcharge is incorporated in the 5%. This means I’ve paid GST on GST.
As @hlyth1 pointed out, most of the items I purchase overseas are not available within Australia.
Some manufacturers treat Australia as a dumping ground for inefficient products, restrict their imported product range or licence ‘approved’ suppliers resulting in an inflated cost. Where is the government positioned in representing consumers against such restrictive practices.
Given purchases from overseas suppliers are exempt (in the most part) from compliance with ACL but still manage to increase sales and outperform some Australian based companies incuding Harvey Norman. I don’t mind paying GST on imports, provided Australian business are paying higher taxes to cover associated collection costs, given they will be the ones benefiting(?).
Doesn’t anyone get the fact the cost of implementing this strategy will adversely affect the competiveness of Australian companies. My aim is to support bricks & mortar to ensure they continue to be represented in the consumer market, online Australian companies (because we can be efficient and compete in/with overseas markets), then offshore. Price, warranties, ACL and availabity affect the decision.
Sounds typical of Adobe.
I realise others have answered this, but since the question was directed at me I feel I should add my bit.
To be able to buy online and have products shipped two Australia will in many cases require two components:
- A VPN or other means of hiding the fact that you are from Australia. Choice has a comparison of these on its website (if you are a subscriber), but I suggest you also have a look at the VPN comparisons at That One Privacy Site. This takes into account how likely your VPN is to hand over information about you to third parties (including governments). I use Pure VPN, but continue to evaluate what I want/need it for.
- A freight forwarding service. These provide you with an address in the country of origin (US, UK etc.), which you use when shopping. Anything sent to that address is then forwarded to you… for a fee. Again, Choice has recently published an article about these, along with a comparison table. I personally use Shipito.
One comment on VPNs: if you use Opera’s browser it has a VPN built in, which allows you to choose your ‘virtual location’ (between Americas, Europe, Asia, and ‘optimal’).
There are many good online book stores. There is also a comparison site - Booko - which I find invaluable and includes new and second-hand prices. It shows local and international sources, and prices in AUD.
No. If an item is not delivered to Australia then no GST applies. You may still have to circumvent any geo-blocks.
My first order from Amazon is recorded as having been made in 1999. In fact, that does not actually show my first order - which I clearly remember as being a particular book.
More broadly, the government of the day wanted to promote international trade in goods and services (as does the current government - as long as you are the ‘right’ trader).
Nope. Nada. This has nothing to do with the tax base. There are plenty of things the government could do to stop tax ‘minimisation’, but this is actually going to cost the Australian economy. It is structured so as to reduce competition.
I blame Gerry because he led the campaign for this to ensure his own businesses continued to prosper behind an effective trade barrier. The appropriate approach would have been to apply GST on point of entry - but that wouldn’t discourage foreign companies from doing business with Australians.
Another fine example of bureaucracy gone mad… Best one are the suppliers who charge the premium then order it in because they don’t keep stock. This will fail it will cost to much to police.
It would be if everyone was responsible for the collection and payment of the GST…which was originally bandied about by the commentators who disagreed with this GST loophole being closed.
As the 1 July 2018 plan is for foreign businesses who allow Australians to purchase products on their online platforms will be responsible for collecting and paying the GST. This in effect will be no different to that which exists for business which are operated in Australia either online, bricks and mortar or both.
It appears that some of the big companies like Amazon think they should not be collecting GST from all their operations (UK, US, India, China etc) and have made a decision to block Australians from their non-Australian online platforms. This is their business decision as it would be relatively easy for companies like Amazon to write script which adds Australian GST on the payment screen when the delivery address is Australia. If they chose not to, it is their business decision. I wonder if in the longer term they may mirror some of the popular online foreign purchases to their Australian website so that GST can be applied and also shipped from overseas?
As I indicated above, I can’t see every potential business in the world registering for GST in Australia so that they can ‘legally’ sell and ship items to Australia. I suspect many foreign businesses, especially the small to medium ones which have websites, won’t and will continue to ship to Australia without collecting the GST. It will be interesting how the government deals with such companies in the long term…do that plan to use the Great Australian Bight Firewall to block non-conforming businesses…hardly think so.
We were very interested to read the comments in this thread. I’ll be sure to discuss this with my colleagues, and thanks all for the discussion.
@SueW - thanks for letting us know and sorry to hear you also faced some discriminatory behaviour. I’ll also be flagging your experience with my colleagues in investigations.
This is a disincentive for foreign businesses that would otherwise consider including Australia as one of their potential markets. It is asking them to collect taxes for a foreign government, and up until now GST on imports has been collected at the border - recognising the effect on competition of expecting businesses to collect taxes for all jurisdictions into which they might trade.
A company that has occasional orders from Australia would be more sensible to refuse to participate in this market than to collect tax on behalf of Australia. Hence the way this is being implemented is anti-competitive and ultimately will cost us as consumers.
Precisely. You suggest that this will lead to unlawful behaviour (it may) - again showing how badly it has been designed. You want to design tax measures to be as unavoidable as possible - that was the point of the GST! I expect many potential sellers will just choose not to export to Australia, and those who lobbied for this change (such as Mr Harvey) will get exactly what they wanted… less competition.
There is of course another possible outcome from this change: retaliation by other governments that have similar tax regimes and ‘loopholes’ for direct imports. Again, A Bad Thing™ for consumers and for Australian exporters.
Yes you can if it has been applied incorrectly ie on a non-taxable non EU purchaser. This right is contained in “ORDINANCE N N-12 OF 24 AUGUST 2006 ON REFUND OF PAID VALUE ADDED TAX TO TAX- NON-OBLIGED NATURAL PERSONS, WHO ARE NOT ESTABLISHED ON THE TERRITORY OF THE EUROPEAN UNION (TITLE, AMEND. SG, 6/2012, IN FORCE FROM 20.01.2012)”
Use the Opera browser and turn on the included VPN and set it for the country you are buying from. So, install Opera, then Google how to turn on the VPN. This is easy when you use a PC or laptop. Then you could also use the Tor Browser and that would make it even harder for the seller to find out where you are. But you would also have to supply a postal address in that country. But once setup they do not need any other input to look after. Check out parcel forwarding.
A few years ago I needed a new washing machine in a hurry. I had done some research as I knew the old one was on its way out. Rang Harvey Norman here in SA on a Saturday and left several messages. Needless to say no one phoned me back. Took my car to The Good Guys much closer and convenient to where I live. Got a great deal from them and bought the washing machine right away. In the end Im so grateful that I never heard from HN as I would have paid more and not got 6kl of washing powder thrown in.
If using the Tor browser pick an exit point in the country you are wanting to buy from. If you pick an inappropriate country or allow Tor to automatically allocate it you could end up being denied the purchase or paying VAT and State taxes you didn’t account for and once you receive the item you will have to apply for the refund of those taxes.
If using some forwarding services they will repack the goods to ensure lowest freight cost and this can then make the goods considered 2nd hand and you could argue a lower GST impost based on a 2nd hand value of the goods.
But really the easiest treatment is to have the Australian Government collect the tax here via it’s already existing processes like they do in the EU for VAT.
Don’t really understand what’s the fuss about.When purchasing something don’t you always shop around and get the best possible price.In doing so you probably be no worse off paying for a product in Australia than getting something from overseas,which you have not seen with your eyes.Then hoping when it arrives their is no problems.Support Australian business with your money if you have a issue you can return it in person.Anything from overseas good luck.I have no issue with Gerry Harvey whatsoever.Competition has come and gone and he has been the most successful.Remember only a handful of years ago he was in big trouble since he was not operating on-line his business struggled but soon as he did things turned around very quickly.Keep the money in Australia don’t send it overseas
- Most of the products you buy are still made overseas - so it’s not really ‘supporting Australian business’ in a big way (except via the indecent mark-ups we are presented with in this country).
- Based on some of the comments in this thread, you’re lucky enough to get service when you’re trying to buy - good luck if you have a problem!
This will cost everyone whether you purchase from overseas or not. Given the increase in the number of ACL complaints including the ACCC actions against Harvey Norman the higher prices paid within Australia in most instances cannot be justified. There are no import tariffs, freight/parcel post from overseas is often cheaper than Australia post charges, freight tracking in America and Europe is second to none.
This action has put Australian retailers/businesses in a poor light. It is a form of protectionism and anti competitive. Harvey Norman is entitled to make money, but it shouldn’t be at my expense or freedoms. I guess “duty free” should be out also?
And yet Harvey Norman makes Fair Tradings most complained about list every month. They need to get their act together before complaining about anything.