Amazon can't or won't collect sales tax in Australia

Alicia Cross
June 2, 2018

Under the new GST collection laws, online retailers like Amazon will be forced to apply the 10 percent GST to goods purchased on worldwide sites and shipped to Australia. A loophole in tax regulations, however, means that the GST is now applied only to items purchased from overseas retailers if they are worth $1,000 AUD or more, which many local companies argued gave Amazon, eBay and other overseas competitors an unfair advantage.

Just how the world's overseas online retail giants would react to Australia's new (and controversial) GST rules had since been confined to the realm of speculation. until now.

Shoppers visiting the USA store Amazon.com will be redirected to the Australian version, Amazon.com.au, from July 1 when Australia starts applying new tax rules, Amazon said in a statement on Friday.

The move may help drive traffic to Amazon's Australian website, which has drawn criticism for a thin product range and uncompetitive prices since it began taking orders in December. While Amazon did not specifically mention this, the ban will most likely apply to other Amazon online stores (such as those for Germany, UK, Japan, etc.), as goods bought from those stores are also susceptible to the same tax. As a placation, Australian customers will also have access to 4 million products that were previously available only on Amazon.com through its new Global Store.

The move will likely drive traffic to Amazon's Australian website, testing the patience of shoppers who have complained about its thin product range - a tenth the range of its USA site - and uncompetitive prices since it began taking orders in December.

"I think it is disappointing that Amazon have taken this out on consumers in Australia but that is their commercial position", Mr Morrison said.

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Amazon is getting a bit of flack this afternoon over its intentions to re-direct Australian visitors to their global site to their Australian arm thanks to upcoming changes to GST on imported goods.

The government would not back down on the new tax rules, which would raise AU$300 million a year, Morrison said.

Retail stocks on the ASX rose following Amazon's announcement.

The move comes after the Australian government has expanded a local tax named the Goods and Services Tax (GST) to online goods shipped into the country.

Amazon said Australian customers will still be able to buy products sold by Amazon US on the Amazon Global Store.

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