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.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.