New Australian law applying GST to imported digital products and services
November 1, 2016
Australia has introduced a new law applying the Australian Goods and Services Tax (GST) to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales from 1 July 2017.
What services and digital products are covered by the measure?
Examples of digital products include downloaded movies, games and electronic books. Examples of services include architectural, legal or educational services. The new law applies very broadly to sales of anything except non-digital goods or real property.
If you sell through an electronic distribution platform, for example an app store, the platform operator is responsible for registering, reporting and paying the GST.
Do I need to register for the Australian GST?
If you sell digital products or services to Australian consumers and you meet the registration turnover threshold, you need to register for GST with us. You will meet the registration turnover threshold if your sales to Australian consumers in a 12 month period are A$75,000 or more. Once registered, you need to report and pay GST to the ATO on sales made from 1 July 2017.