Tech Industry

Official: Australia set to charge GST on all online purchases from 2017

Netflix, Amazon, Steam and Google Play are all on notice as state and federal treasurers agree to apply GST to all goods and services sold online into Australia.

Products and services sold into Australia via online vendors will have the good and services tax applied to them from July 1, 2017.

Federal Treasurer Joe Hockey announced the move in a televised press conference Friday afternoon. Hockey said that state and federal treasurers had reached an accord on the decision during meetings in Canberra.

Currently, the GST only applies to online purchases above AU$1,000. The Australian federal government first mooted the changes in April this year. Erroneously dubbed the "Netflix Tax" the measure will see the introduction of the GST on "intangible" products such as content streaming services as well as eBook purchases, app downloads and the purchase of songs, TV episodes, games and movies through services such as the Google Play store.

The "low-value threshold" that saw overseas purchases under AU$1,000 avoiding GST had long drawn the ire of bricks and mortar retailers and Australian-based online stores.

"This will deliver competitive neutrality for Australian businesses it will ensure there is a fair and equal treatment of all goods and services," Hockey said.

The tax changes had been expected to start at an earlier day, with modelling from the federal government back in May suggesting the changes would net AU$350 million in revenue over 4 years.