Aussie tax catches Trade Me
Trade Me appears resigned to having to collect sales tax (GST) on all items that its Kiwi members ship to Australian customers from July, curbing a small but lucrative trade for some of its members.
The obligation will arise because of the way the Australian government intends to implement a so-called ‘‘Amazon tax’’ on internet shopping in July.
As in New Zealand, pressure for the tax has been building because of concerns that local retailers have to compete against foreign e-commerce companies on an uneven playing field with regard to sales tax.
The Australian government had already decided that, from July, foreign firms that sell more than A$75,000 worth of goods to Australians each year would be obliged to collect sales tax on all their sales to Australians. At present the 10 per cent tax is payable only on purchases costing A$1000 (NZ$1100) or more.
However, the Australian Productivity Commission recommended in a report released last week that the rule should also apply to electronic marketplaces or so-called ‘‘Electronic Delivery Platforms’’ (EDPs).
Trade Me appears to meet the commission’s criteria for an EDP, which it describes as ‘‘websites, internet portals, gateways, stores or marketplaces that allow other vendors to make sales online using their platform’’.
The commission has recommended such marketplaces should collect sales tax if they facilitate sales worth more than A$75,000 to Australians, regardless of whether any particular trader making a sale exceeds the threshold.
That would mean the likes of Trade Me, eBay and Alibaba would have to collect Australian sales tax even in cases where a private seller was making a oneoff sale to an Australian of an item worth only a few dollars through its platform.
Trade Me started to support traders selling into Australia in 2009, when it allowed Australian buyers to select ‘‘Australia’’ as a country when choosing a delivery address.
The fact that Australians can buy new items through Trade Me without paying GST – and vice versa if New Zealanders are buying from Australian-based traders – is believed to have led to increasing trans-Tasman trade through the platform.
Trade Me spokesman Logan Mudge said it didn’t see the Australian tax change having much impact on the company as Australian purchases made up less than 1 per cent of trade through its platform.
Trade Me might have to collect sales tax on even small trans-Tasman trades.