What does the Netflix Tax cost you?

The Netflix Tax has taken effect. Here's what it costs you.

Originally proposed in 2015, the so-called "Netflix Tax" put an added GST on intangible digital services like Netflix and iTunes.

The decision to tax intangible products first came about after a 2012 review by former premiers Nick Greiner and John Brumby, where it was found that lost revenue on software downloads amassed to around $1 billion a year. By 2015, the decision had garnered support from NSW Premier Mike Baird, the Australian National Retail Association and the Shop, Distributive & Allied Employees Association.

In response to this rising concern from Australian businesses, the federal government passed a Goods and Services Tax Ruling stipulating that a 10% surcharge would apply to digital products and services purchased from overseas companies. This ruling required international businesses earning more than $75,000 per year from Australian consumers to charge GST on their products and services.

What does the Netflix Tax apply to?

As per the federal ruling, the Netflix Tax applies to "imported services and digital products". This is a broad category that focuses on intangible purchases rather than physical goods, and includes – but is not limited to – the following:

  • Ebooks, movies, TV shows, music and online newspaper subscriptions
  • Online games, apps, software and software maintenance
  • Virtual currency for apps and online games
  • Video streaming services
  • Webinars or distance learning courses
  • Insurance services
  • Gambling services
  • Online dating services
  • Booking services for events or places within Australia (such as hotel accommodation or sports events)
  • Website design or publishing services
  • Professional association services (ie, membership fees)
  • Legal, accounting, architectural or consultancy services

When did the Netflix Tax take effect?

The Netflix Tax ruling didn't technically take effect until 1 July 2017, though Netflix itself got out ahead of it by increasing the price of its plans from 28 June 2016. While the Basic plan only received an 11% increase (from $8.99 to $9.99), the Standard and Premium plans saw a slightly higher increase. The Standard plan rose from $11.99 to $13.99 per month (a 16.7% increase) and the Premium plan went from $14.99 to $17.99 per month (20% increase).

Check the table below for more information on Netflix Australia's pricing changes.

Netflix Australia pricing Basic Standard Premium
Old monthly price $8.99 $11.99 $14.99
New monthly price $9.99 $13.99 $17.99
Stream quality SD SD/HD SD/HD/Ultra HD
Maximum simultaneous streams 1 2 4

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