Australian government to introduce a ‘Netflix tax’

11 May 2015

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Australia is to introduce a so-called 'Netflix tax' on digital purchases

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The Australian government has confirmed that it is introducing a ‘Netflix tax’, meaning Aussies will have to fork out an extra 10pc for digital services from companies like Netflix, Google, Steam and Amazon.

Australia’s treasurer Joe Hockey has confirmed that the country’s Goods and Services Tax (GST) will now be charged to all digital products (or ‘intangible’ products), such as downloaded games, streamed movies and e-books. Outlets will be asked to add the levy at point of sale.

“What we’re doing is going to digital providers overseas and saying ‘can you apply the GST to the products you provide into Australia?’,” Hockey told a press conference, IT News reported .

“They are agreeable to it. It’s not their profits [being taxed]. It’s a tax collected and they remit it back to the country where that occurs.

“There are some providers of goods that are based overseas that are prepared to charge the appropriate taxes in that jurisdiction. There are other companies that won’t, so we are trying to get a global approach.”

The move seems odd (as odd as a new tax can seem anyway) as the GST only currently applies to imported physical goods valued at more than AU$1,000. The Australian government claims introducing the levy for products worth less would cost more to enforce than it would raise. Also strange is that Australian consumers have already been paying GST on purchases from Apple’s online store.

In any event, Hockey believes once the GST expands to digital services, which is expected to occur sometime after 1 July, it will raise AU$350m over four years.

 

Dean is a freelance journalist and editor covering media.

editorial@siliconrepublic.com