Important: “Netflix tax” effective 1 July 2017

[aus-yoyoyo]

Hi there,

I just received this email from eBay saying the following:

Important: “Netflix tax” effective 1 July 2017

From 1 July 2017, Goods and Services Tax (GST) will apply to fees on eBay.com.au, due to new legislation in Australia (the "Netflix Tax").

Businesses registered for GST will not be affected by this change if you register your Australian Business Number (ABN) with eBay here.

More information on this new legislation can be found here.

... so, apparently if you are registered for GST you can register with eBay for an "exemption" of GST on the eBay fees.  Why is this?  If I'm registered for GST, shouldn't I be paying GST on the fees?  Why would I be exempt?  I don't understand what this means.

I tried clicking the "More information" link, but it just goes to eBay.com.au home page (?)

Anyone have any idea what this is about?

Thanks!

Matt.

[*emprades*]

Just Google netflix tax and you can find the AU Govt page that explains it all. All legit and charges GST to all overseas businesses that sell services or digital products. About time really.

[ameliardcottage]

I have this message in my eBay in box so it is definetly legit. Had a quick read of the legislation and it seems it applies to digital products such as music, movies and apps. Therefore I think that it means that eBay is supplying us a digital platform on which to sell out goods in return we pay eBay fees to get access to there selling platform. eBay (Final Value-Store Subscription etc) fees will then be +10% GST.

This is how I read it. I would be glad if someone else has a different understanding. An additional 10% will make a a big difference on how much we are already being gouged by eBay.

Oh just had another thought. I guess this will also apply to postage labels which already include GST and possibly eating up the Aust Post discount. Would this mean double dipping GST on postage?

Too many questions and as usual not enough clarifiaction be eBay.

[lyndal1838]

I read on another thread that the GST will be on the ebay fees less the postage you have paid.

[theforevergarden]

That's kind of the issue. Ebay haven't communicated clearly at all what is happening and what it is doing. I mean they could add a gst on cart totals, they could charge 10% of sale and invoice that fee along with existing (and if so maybe people should be increasing their pricing...which inturn increases the fee....), it could be as you say, etc. Ebay should be communicating specifically what is happening to it's users and they aren't and the entirely ambigious email they sent links to a more info page that doesn't exist....seriously come on basic competence please. 

[ameliardcottage]

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@lyndal1838 wrote:

I read on another thread that the GST will be on the ebay fees less the postage you have paid.

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Interesting, I haven't come across that, but for most of us it still won't help if your sell price includes postage. eBay has basically forced us to list as Free Post to get higher visability in search results. We would still have to pay gst twice on postage. Once on the final value which includes postage and again when we purchase postage labels or stamps.

If it is only on eBay fees not including postage, as sellers tryiing to make a profit in a tight marketplace we might have to consider reverting to price plus postage.

[lyndal1838]

I am not a seller here but as I see it you claim for the postage that you buy on your income tax.   Only if you are GST registered could you claim the GST back when you do your BAS.  Anyone who is registered for GST would know what to do to claim it back.

Ebay is only adding the GST to the final value fees of the item and the postage.  If your postage is already built into the item cost then you are only paying GST on the same amount of money.

As the GST on a $1 stamp would be 9 cents anyone who is not GST registered would have to pay the ebay GST of 10% on that 9 cents....less than a cent.  If your business cannot absorb a fraction of a cent per $1 of postage then increase your handling fee or the item cost.

[davewil1964]

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@lyndal1838 wrote:

I am not a seller here but as I see it you claim for the postage that you buy on your income tax.   Only if you are GST registered could you claim the GST back when you do your BAS.  Anyone who is registered for GST would know what to do to claim it back.

Ebay is only adding the GST to the final value fees of the item and the postage.  If your postage is already built into the item cost then you are only paying GST on the same amount of money.

As the GST on a $1 stamp would be 9 cents anyone who is not GST registered would have to pay the ebay GST of 10% on that 9 cents....less than a cent.  If your business cannot absorb a fraction of a cent per $1 of postage then increase your handling fee or the item cost.

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IF eBay end up charging GST on eBay postage labels, $7.40 postage becomes $8.14 (plus 15c for the satchel), plus eBay fees on the postage portion of the transaction, 79c for me. Total $9.08. Nett of postage costs - $1.68

Whereas if I bought 10 x 500g satchels from AP, they would cost me $8.075 each, already 22c cheaper. AND I'm not paying more tax than I should. And the total gouge eBay takes is 85c (fees on postage + GST on fees). So I pay eBay half and my nett cost per 500g transaction is $8.93. 15c. Not a lot, but over several hundred transaction per year, significant.

If I save my bikkies up and buy 50 satchels at a time, the price comes down to $7.65 per. A further saving, making eBay labels even less attractive. If eBay wish to destroy their subset of C&S, or MyPost, or whatever it's called this week, this would be a good way to do it.

Sure, selling expenses when you aren't registered for GST are tax deductible, but the ATO doesn't give 100% rebates. It comes off at your marginal rate. If your top rate of tax is 37%, then any added expense (like GST on GST paid items) costs the seller 63c in the dollar. Not insignificant.

[lyndal1838]

But you can hardly call a postage label a fee.  Surely a phone call to the ATO would sort it out.

The email from ebay that I saw definitely said that the GST would be levied on the fees, less any postage you had paid.

This is so typical of ebay's efforts to introduce something new to the site.....give scant information and just let everyone stew about what might happen, instead of following up with a few answers to questions being asked here.

[benolam]

Can you tell me were you saw that the GST would be levied on fees less any postage paid? Thanks.

[kks-second-hand-treasures]

I spoke  on chat the other day it comes into affect on 1st july 2017, you will now be charged 10% GST on all purchases and if you are a seller you will be charged 9.9% for selling and postage (due to sellers over pricing on postage to rip ebay off) plus 10%GST so as from 1st july you sell anything ebay will take 29.9% of sale thanks to Australian government.