Budget 2015: ‘Netflix tax’ to put Australian in vanguard of OECD

The government’s so-called ‘Netflix tax’, details of which were revealed yesterday by Treasurer Joe Hockey, will bring in $350 million of additional GST revenue to the states and territories over forward estimates period covered by tonight’s budget.

The measure will mean that GST is charged on digital goods and services provided to Australians by companies headquartered outside the country. The expansion of the GST kicks in from 1 July 2017.

Hockey said in his budget speech that it “is unfair that overseas based businesses selling services into Australia may not charge GST when local businesses have to charge GST”.

“A local business that employs Australians, pays rent in Australia, pays tax in Australia, and helps build our economy is disadvantaged by the current system,” the treasurer said.

“We will level the playing field for Australian businesses by mandating that foreign businesses supplying digital products and services are subject to the GST.”

“The GST was designed to apply to all products and services, except those specifically exempted, for example fresh food, health and education,” budget documents state.

“This measure ensures that the GST applies to non-exempted products and services, including digital supplies purchased from overseas and from Australia.”

“This measure will result in Australia being an early adopter of guidelines for business-to-consumer supplies of digital products and services being developed by the Organisation for Economic Co-operation and Development (OECD) as part of the OECD/G20 base erosion and profit shifting project.”

The measure has been called the ‘Netflix tax’ after the high-profile US-based video streaming service that started serving Australian customers earlier this year. One of Netflix’s Australian rivals, Foxtel, today announced its support for the measure.

Copyright © 2015 IDG Communications, Inc.

Download: EMM vendor comparison chart 2019
Shop Tech Products at Amazon