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Goods and Services Tax to apply...

Goods and Services Tax to apply to digital services in Australia from next month

From Saturday July 1st 2017, Australia's Goods and Services Tax will apply to all digital services and products that are supplied to the country.
 
Previously, only physical goods that are imported into Australia have been subject to the Goods and Services Tax, but the way that items are purchased, owned and consumed has changed significantly in recent years.
 
With the rise of the internet, the majority of business is now conducted digitally and consumers are increasingly paying for imported items such as music or films that they own only in digital form and therefore don't have the Goods and Services Tax applied to them.
 
However, the Federal Government has realised that this trend is only going to grow further and that the nation will miss out on a significant amount of tax that could be used for a variety of purposes unless the Goods and Services Tax is applied to digital property in the future.
 
The extension of this levy has been dubbed the 'Netflix Tax' in the media, as it will mean that the price of streaming services such as Netflix and other music and film platforms will increase for Australian consumers.
 
As of the start of next month, music files, games, TV programmes and other software accessed via payment over the internet will be subject to a ten per cent Goods and Services Tax. The Federal Government believes that this will help to generate as much as $350 million in just two years, with this money set to be reinvested in the local economy.
 
The amendments to the Goods and Services Tax will also see it apply to the fees associated with listing items on online stores such as eBay.
 
In a statement, eBay.au explained: "Businesses registered for [Goods and Services Tax] will not be affected by this change if you register your Australian Business Number (ABN) with eBay."

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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