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14steve14

After VAT MOSS now Australia is doing something similar.

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This is designed to draw the Apples and Googles, as well as larger entities, into the Australian tax stream. Unless you are selling more than $75,000 worth of digital goods to Australian consumers (which is end users, and doesn't include most Australian businesses), you can safely ignore this new law.

 

https://www.ato.gov.au/Business/International-tax-for-business/In-detail/Doing-business-in-Australia/New-Australian-law-applying-GST-to-imported-digital-products-and-services/?anchor=Registrationsimpleandfull#Registrationsimpleandfull

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This was always going to happen, and is just the begininig (as per the last paragraph of Steve's Tamebay link).

The Australian government has been speculating for quite a while now on how to recoup lost GST revenue from the increasing number of overseas transactions.

So you can expect to see these measures cover transactions for physical products as well, some time in the future.

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The same problem in the US: a state can only require an online seller to collect sales tax if they have a "nexus" in that state (significant operations or physical presence there). Otherwise, buyers are legally supposed to keep track of sales tax they didn't pay, and fork over the money ("use tax") when they pay their income tax. Almost no one does. This results in a huge loss of revenue for states, and brick-and-mortar retailers go out of business because customers come in only to "showroom" (kick the tires) and then go online to make the purchase out of state and avoid paying sales tax. Everyone except Amazon loses. Barring a national agreement to require any vendor anywhere to collect and remit sales tax from all customers, this is going to continue to be a problem.

 

Of course, the best thing would be to get rid of sales tax altogether, as it's a severely regressive tax (the poor pay a higher percentage of their income on this tax than the wealthy do). However, states would have to plug the income shortfall with higher income, wealth (property), and other transaction taxes. Failing that, states need to streamline their tax classes and figuring out the correct rate for a particular customer at a given address. This could mean a statewide flat rate, rather than destination (shipping) address basis.

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