GST & Digital Goods: Consultation

December 2015

As announced in the May Budget, the Government is pursuing legislation to apply GST to digital products and services supplied from overseas.

One of the key pledges for the 2015 Federal Budget was to apply GST to all digital products and services supplied from outside Australia.

The Australian Treasury has released additional draft legislation and a consultation paper that explores how it will extend the GST to those products. It is the second part of a consultation process that builds upon feedback from the first round of consultation in 2015.

There are some changes that were made to the original proposals, which include:

  • Standard GST registration threshold for all residents and non-residents $75,000 for most entities and $150,000 for non profit entities. This is a change from the original legislation that left the threshold to be determined by regulation. 
  • Language changes to what constitutes 'reasonable steps' to identify whether a customer is in Australia. 
  • Removal of references on whether a customer 'is required to be registered' for GST as a relevant consideration for suppliers to consider.
  • Greater clarity around the provisions for an entity to elect limited registration.

The amendments also now include transitional rules for items that are supplied periodically or progressively and are attributable to a tax period starting before 1 July 2017. This is a similar approach to that taken with the GST when it was first introduced to Australia.

For more information about GST and digital products and how it affects your business, please contact us on 02 9957 4033.

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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