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New Law Applies GST to Imported Intangibles

GST (Goods and Services Tax) on imported intangibles has been a topic of conversation in recent years as the market for online goods and services continues to grow.

Currently, imports not categorised as goods or real property are generally not subject to GST. From 1 July 2017 a new law applying GST to international sales of services and digital services will apply.

Intangibles Covered by the New Law

The changes will relate to a broad range of products including streaming or downloading movies, music, games, apps, e-books, and including acquiring legal or architectural services.

Register, Report, and Pay GST

Overseas businesses selling these products to Australian consumers who meet the registration turnover threshold of more than $75,000 will be required to register, report, and pay GST on sales starting 1 July 2017.

For sales that are made through a platform, such as an app, the app operator is responsible for registering, reporting and paying the GST.

The Australian Taxation Office (ATO) advises, a system will be available via the ATO website starting 1 April 2017 so businesses can register electronically, lodge, and pay the GST.

If you need any clarification or if you have questions regarding this new law, you can contact us at (08) 9301 2200, +61 8 9301 2200 for international calls or email us at clientcare@mckinleyplowman.com.au.

written by:

McKinley Plowman