The shopper’s guide to Australian GST changes 2018
New GST legislation will be taking effect on 1 July 2018, and it will affect some of your favourite international shopping sites.
GST was introduced on 1 July 2000 and since that day, all Australian retailers have been charging customers a 10% tax on goods and services. But typically, international businesses selling to Australian customers have not had to pay this tax.
All this is about to change when new tax laws take effect on 1 July 2018. International retailers selling to Australian customers will now be charged GST on items under AUD$1000. Here is how these change can and will affect Australian shoppers.
GST (a 10% tax on the retail price) will now be charged on all international items shipped into Australia.
Previously, GST was only required to be paid on international items shipped to Australia that cost over AUD$1000. New legislation means that GST will now be charged on items costing less than AUD$1000 too. This change comes into play on 1 July 2018.
What exactly is changing?
International stores will now be required to charge GST on a number of items. Some of Australia’s favourite shopping sites, including Shopbop, Missguided and even Amazon, will be subject to these changes.
While some stores may choose to just absorb the new 10% charge, it is more than likely that most international shopping sites will increase their prices by 10% at the checkout in order to cover this new cost.
Do we know which international stores will be affected?
The answer is not completely clear.
There are some stores that are obviously based internationally, but then there are stores that started overseas but have an Australian presence. This means that they may have been charging Australians GST already, so their prices won’t be affected.
International shopping sites like ASOS and Boohoo, while based overseas, have dedicated Australian sites and Australian-based warehouses. Stores such as these may already be subject to GST, so Australian shoppers may not see any pricing changes.
finder reached out to a number of stores for answers and we received confirmation from a few international sites.
UK-based Missguided explained that it will now be required to charge GST on items under AUD$1000 that are shipped to Australian customers. But a Missguided representative explained that despite this, there are no plans to increase prices. So fans of Missguided need not worry!
eBay has said that they're currently working on a fix that will allow for these GST changes but shouldn't interrupt the shopping experience for customers.
eBay's statement says: "We will have a solution enabling Aussies to continue to shop from all eBay sites while also capturing the required GST. This requires major changes to eBay’s global systems and we are working to have these ready by 1st July. Australians will continue to be able to buy from any eBay site."
Amazon’s US and UK stores also fall under the new GST laws. Amazon chose to combat this by sending all Australian traffic straight back to the Australian store. Australian-based customers can no longer access the international Amazon stores. Amazon did make a few million US and UK products available through the Australian store, but the vast majority of Amazon’s global products will no longer be available for Australian-based shoppers to purchase. In essence, Aussies are being blocked from accessing the global Amazon sites.
To be safe, Australian shoppers should assume that all internationally-based online stores will now be charged an extra 10% on items under AUD$1000. Whether stores pass this cost onto the consumer will depend on the individual store’s policy.
Why is this happening?
These changes were proposed to make the retail environment fairer for Australian sites and businesses. Australian retailers have been subject to the 10% GST since it was introduced, but international businesses (often selling the same products) were able to sell their products to Australian shoppers without being charged that extra 10%.
As a result, many Australian retailers are forced to absorb the cost of the 10% tax themselves in order to stay competitive. If they pass the charge onto the consumer, then local stores could lose business to the international players.
In essence, this tax change was proposed to level the playing field between international retailers and local Australian retailers.
Didn’t these changes already come into effect ages ago?
This GST change was part of a series of GST changes that were colloquially referred to as “The Netflix Tax”. The tax on international digital services (like Netflix) took effect on 1 July 2017. But the GST on low-value imports was postponed and won’t take effect until 1 July 2018.
Are there exceptions?
These GST changes only affect low-value goods, meaning items under AUD$1000 in value.
These changes will not affect the following:
- Items over AUD$1000 since GST is already charged on these
- Items purchased from businesses turning over less than AUD$75,000
So if there’s something you’ve been wanting…
Snap it up now at the end of financial year sales before the GST laws are put into place. These laws cover fashion, tech, homeware and more. If you’ve had your eye on a new laptop or art piece, you should try and buy it before the new tax takes effect.
Or try and find the same product at an Australian retailer. All Aussie stores have been charging GST for years and many of them have found ways to be competitive with pricing over international stores. Shopping locally is always a friendly option for local businesses and the local economy.
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