Home > Latest News > Leaders Agree To Close Online GST Threshold Loophole

Leaders Agree To Close Online GST Threshold Loophole

Leaders Agree To Close Online GST Threshold LoopholeA “leaders’ retreat” held by Prime Minister
Tony Abbott with State premiers and chief ministers agreed to broaden the GST
to include overseas online transactions under $1000.


“As a first step, there was agreement in principle by leaders to broaden
the GST to cover overseas online transactions under $1000,” a statement
said. “This matter will be referred to the upcoming meeting of treasurers
to progress in detail.”


The treasurers’ meeting in late August will consider reducing the threshold from
$1000 to $20.


Currently, GST applies only to parcels purchased from overseas that are valued
at more than A$1000.


Federal Treasurer Joe Hockey said he has found a way to collect GST on all
imported parcels, which he will share with State premiers when they meet in
August. Previously the Government has said collecting the sums involved would
cost more than the revenue gained.


Hockey has also previously noted there are plans to apply the 10 percent tax to
digital items, including books, music, TV shows, films, and subscription
services, now sold in Australia by foreign-based companies such as Netflix and
Apple.


The plan to tax digital goods, which Hockey said has the potential to generate
billions of dollars in revenue, follows moves by the government to crack down
on profit-shifting practices by multinational companies that employ the
so-called “double-Dutch-Irish sandwich” method of¬†
funnelling profits
through its Ireland-listed company and the Netherlands in order to pay a lower
tax rate in Australia.