topic Re: Interesting Read About GST Collection from Overseas Sellers/Websites in Selling

Interesting Read About GST Collection from Overseas Sellers/Websites

clarry100 — Thu, 15 Sep 2016 20:35:23 GMT

Wonder how they intend to enforce collection of GST from the 1000's of Chinese-based sellers who continually flood the ebay.AU site with inferior cheap products and knockoffs.

Shut down/block ebay.AU if they don't comply???

I can just see all the Chinese sellers saying yep no worries we will increase all our prices by 10% and send you a GST cheque each quarter -- NOT.

https://www.choice.com.au/shopping/online-shopping/buying-online/articles/gst-overseas-website-block

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

everard6920 — Thu, 15 Sep 2016 22:19:10 GMT

This from a government that couldn't even ensure the security of the Census website.

It's not going to happen, I'm afraid. It'd be an absolute nightmare to implement.

The way I see it, the government has a few options. None of them are easy to implement:

1. Block the websites/sellers who don't comply (as above). People will use VPNs to get around the blocks, and good ole email ordering (send the seller an email and order goods, rather than buy from the blocked site).

2. Get Visa and Mastercard on board, and get them to apply it at the point of purchase. IIRC, they've already said no, and people could still bypass this using international money orders, anyway.

3. Implement the same system used for shipments over $1000 - you get a bill and you go and pay it. I think it has been concluded that the cost would outweigh the revenue to do this for shipments under $1000, though.

There's a reason that this has never been implemented - because it's too costly and too difficult. I just don't see this happening without major problems.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

clarry100 — Fri, 16 Sep 2016 03:04:56 GMT

@everard6920 wrote:

3. Implement the same system used for shipments over $1000 - you get a bill and you go and pay it. I think it has been concluded that the cost would outweigh the revenue to do this for shipments under $1000, though.

There's a reason that this has never been implemented - because it's too costly and too difficult. I just don't see this happening without major problems.

I like your #3 option the best. That way there is no blocking of websites necessary at all. People can still buy if they wish.

If they did it this way but then put a processing fee in place to offest the collection costs, for declared values under $1000.

Let's say a $15 fee for example.

That would almost certainly stop the buyers who buy the $2.00 items from Chinese sellers because suddenly the price is +GST = $0.20 +fee = $15.00. Then the $2.00 item costs $17.20 into the buyer's hands.

Is it the UK who has the collection fee model in place???

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

ircinic-7 — Fri, 16 Sep 2016 03:19:45 GMT

Charge eBay 10% extra for all those shi**y OS sales.

They of course pass it onto the sellers.

A hike in their fees, could bring them into line for a more even playing field.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

clarry100 — Fri, 16 Sep 2016 06:51:45 GMT

@ircinic-7 wrote:
Charge eBay 10% extra for all those shi**y OS sales.
They of course pass it onto the sellers.
A hike in their fees, could bring them into line for a more even playing field.

Do you mean the govt legislates to make ebay.AU forcibly collect GST from any seller who is registered outside Australia but listing items for sale on ebay.AU?

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

digital*ghost — Fri, 16 Sep 2016 16:45:28 GMT

This is such a backwards-thinking way of implementing GST on imports, and another stupid example of the "big stick" method. If the government wants outsiders to bear the costs and burden of collecting tax from Australians on their behalf, the least they could do is give them a proper incentive, rather than threaten consequences.

Not to mention that near as I can tell, this method will just have a similar effect on overseas sellers that it does on Australian sellers (i.e. small and micro businesses can be a little more competitive with their larger counterparts by not having to charge and collect GST), so I see no real benefit to Aussie sellers except in cases where the items will become more expensive OS from everyone who is making it available to Aus consumers (on the presumption that the majority of OS purchases are speacialty items, or based on price, which can still be purchased cheaper from a business that isn't turning over $75k).

Trying to figure out who the laws should apply to, who should be blocked etc etc etc just seems like a massive waste of time, or maybe just hot air, not to mention there's a world of technology out there that could simplify and streamline the whole darn thing if the gov't would just get with the 21st century already.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

character_parties_aus — Fri, 16 Sep 2016 18:55:50 GMT

The law will only apply to consumers just to further complicate the issue. So for someone like me, a business that regularly imports $999 worth of stuff there is no change and even if there was I just claim back the GST on larger imports as I do now. More admin basically. I actually dont care if I pay the GST or not as there is just the cashflow consideration to consider there is no net change to my cost of sales unless import freight costs rise due to additional admin burden.

I can see a huge spike in people setting up ABN's and registering for GST.....

There are so many ways to get round this its unreal, it appears to be uninmpementable. Surely there are smarter ways to raise $300m which is a drop in the ocean in the big sheme of things. Or do they just want to appease Harvey Norman and annoy Kogan?

I'll just buy anything through my business, import it and write it off. Another way round it. If I can think of two ways in 3 minutes there is going to be a long list of avoidance tactics. Lots of overseas retailers will be advertising "10% reduction for ABNholders" and so on.

Such a waste of time.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

everard6920 — Fri, 16 Sep 2016 21:45:57 GMT

I import my stock too, and it's not paying the GST that bothers me (although I do find it unethical paying GST on items that have no association with Australia). It's that you know they're going to do this in a way that'll be annoying and/or costly to the consumer.

And the $300m revenue is before costs. So it's actually going to be less than that. The government hasn't released any information about how much any of this will cost.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

character_parties_aus — Sat, 17 Sep 2016 00:28:08 GMT

The Goverment have released costings buddy see link below. And as you'll see the 'profit' is negligable in the short to medium term. It's all to do with the likes of Gerry Harvey and nothing else. I probably actually benefit from the GST addition as many of my competition are much cheaper than me as they sell abroad and dont have this cost. I still think it's a beyond stupid idea though. Still Gerry Harvey can clearly afford to buy the treasury department more expensive bottles of wine than I can. Snouts in the trough and all that OINK OINK!

Budget 2016-17 - Budget Paper No. 2 - Part 1: Revenue Measures - Treasury

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

everard6920 — Sat, 17 Sep 2016 09:49:04 GMT

^ Thanks.

It's been a very long day so forgive me if I'm overlooking something really obvious, but my other question is, re: blocking: how are they going to know who has a turnover to Australians $75k+, and who doesn't?

Are they expecting to gain access to the financial records of every overseas seller who sells to the Australian market, or what?

Are they just going to guess, and block accordingly?

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

character_parties_aus — Sat, 17 Sep 2016 17:59:25 GMT

Just another loophole!

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

clarry100 — Sat, 17 Sep 2016 22:34:16 GMT

@everard6920 wrote:
^ Thanks.

It's been a very long day so forgive me if I'm overlooking something really obvious, but my other question is, re: blocking: how are they going to know who has a turnover to Australians $75k+, and who doesn't?

Are they expecting to gain access to the financial records of every overseas seller who sells to the Australian market, or what?

Are they just going to guess, and block accordingly?

Yes indeed... very good point.

The only way I can see they could estimate it is to have ebay.AU (if that is their selling platform) provide reports of every foreign registered seller and if they have more than the $75K in AU sales in any one year then they request a GST payment from them.

However, if they sell from an independent website (eg AliExpress or AliBaba or similar) then they can't know.

==========================

To quote the document above...

"Overseas suppliers that have an Australian turnover of $75,000 or more will be required to register for, collect and remit GST for low value goods supplied to consumers in Australia, using a vendor registration model."

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

character_parties_aus — Sun, 18 Sep 2016 09:11:13 GMT

ebays just the tip of the ice berg clarry and is but a small dot in the ecommerce world. the amount of stuff brought in from other places is huge. I would imagine the best way of checking though is for customs to keep their eye on volumes brought through by exporter - which with a bit of thought would not be that hard - and when the volumes / value go over a certain amount they perform further checks if GST not being paid. Job done.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

everard6920 — Sun, 18 Sep 2016 21:35:18 GMT

@character_parties_aus wrote:
ebays just the tip of the ice berg clarry and is but a small dot in the ecommerce world. the amount of stuff brought in from other places is huge. I would imagine the best way of checking though is for customs to keep their eye on volumes brought through by exporter - which with a bit of thought would not be that hard - and when the volumes / value go over a certain amount they perform further checks if GST not being paid. Job done.

I disagree, I think this would be near impossible - keeping records of everyone who sends something into the country would be a massive undertaking (unless technology improves to a point where handwritten names and addresses in hundreds of languages can be reliably scanned and recorded automatically). Otherwise, we'd all be waiting for our overseas mail for 10 years.

Maybe that woud work for large retailers, but it wouldn't work for small/medium retailers. It's too easy to disguise what you're sending as non-merchandise, and many countries don't even ask for ID when you send something overseas, so you could use 50 different names and addresses to send out your items. I mean, if I were them, that's what I'd do. Why on earth would I collect and send money to a foreign government? Would you? Sellers will do whatever they can to get around it.

Unless you're send out your goods emblazoned with your company's logo on the side of the box (a la Amazon), then it would be really difficult.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

everard6920 — Sun, 18 Sep 2016 21:43:06 GMT

I even thought about the possibility of the government issuing overseas retailers who have registered for GST with a code of some sort, which would be displayed on the incoming package.

However, you'd have the same problem: how do you differentiate between Sally's mum sending Sally (who's on holidays from the UK) a pair of jeans she forgot to pack, and actual merchandise from a store (and if that store turned over 75k)? Sally's mum wouldn't have a GST code, and anyone who didn't want to register for GST could pretend to be "Sally's mum" rather than a retailer.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

clarry100 — Sun, 18 Sep 2016 22:05:03 GMT

I agree that collection overseas at the point of dispatch would be almost impossible to implement and manage.

If its going to be done at all I think it needs to be done at the point of arrival as is the case now for anything over $1000 in declared value.

However, since the cost of collection would outweigh the GST itself, on packages under $1000 then a collection fee would have to be charged as well. Let's say $15 eg.

And this would even include Sally's mum sending the jeans, but this could be subsequently claimed back by showing some form of evidence that it was indeed Sally's mum sending the pair of jeans that Sally forgot to pack.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

digital*ghost — Mon, 19 Sep 2016 01:12:02 GMT

@character_parties_aus wrote:
The law will only apply to consumers just to further complicate the issue. So for someone like me, a business that regularly imports $999 worth of stuff there is no change and even if there was I just claim back the GST on larger imports as I do now.

Unless the Australian business that's doing the importing isn't registered to collect GST (I'm not, so at the moment I keep all of my imports below $1k, but that may change depending on how this gets handled).

Instead of all this faffing about the government is doing, all they need to do is come up with a quick-scan and billing system.

A package arrives in Australia, customs scans a QR code, that code contains contents, value, and purchaser data. If they're only going to get OS businesses with a 75K turnover (in Australia) to collect or qualify as attracting GST, then the code can contain supplier data as well.

Customs, duty and GST- if applicable - is automatically calculated and billed to the purchaser.

If a package marked as merhcandise comes in without a QR code, the details are entered manually.

How can they not consider a system like that, while instead deciding just to target the big players and go galavanting all over the world to convince them to play along... Oh wait, government + free world travel and a waste of time & money....

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

*tippy*toes* — Mon, 19 Sep 2016 12:05:02 GMT

@digital*ghost wrote:

How can they not consider a system like that, while instead deciding just to target the big players and go galavanting all over the world to convince them to play along... Oh wait, government + free world travel and a waste of time & money....

In my neck of the woods, that's known as WoFTAM.

The F isn't the second letter of "of".

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

character_parties_aus — Mon, 19 Sep 2016 19:00:15 GMT

What they need to do DG is spend their time on something which is productvie rather than pandering to Gerry Harvey.

It's not going to be a big revenue raiser its already provied costly to implement and proven likely not to work.

How about getting ebay to pay some tax instead? There's 300m problem solved.

Re: Interesting Read About GST Collection from Overseas Sellers/Websites

airshark3d — Tue, 20 Sep 2016 03:20:56 GMT

I just had a meeting with a representative of the ATO 3 weeks ago about a different matter and was able to ask this question. As of now, even he doesn't know how they plan to do this but his "unofficial" opinion is, that they would be charging GST through the sale exchange platform. Meaning, Ebay would probably be collecting the GST for all sales. If you then, are a bonafide Australian seller (with ABN) then you can register for GST then you can use it as your GST credits. If you are a chinese seller with no ABN and GST, then tough luck, you just have to shoulder the cost. I think their problem is getting those chinese sites (not Ebay) to comply. Worst case scenario, they would probably make it hard for their customers (charging them $15 processing fee) so that they would have to either accept the terms, or accept to lose a lot of customers from Australia.

IMO, if you are planning to run a business, it would be beneficial to register for GST from the start. That way, you get used to the cost and process. I wish I did. I lost a few clients before(to my other business, not ebay) as I had to increase my sale price to accomodate GST. Also, a business with less than $75,000 turnover wouldn't be considered by me as a full-time business anyway, with the cost of living in Oz now (unless your profit margin is 75% or higher) so if ever you decide to run a profitable ebay business full-time, you would register for GST anyways.