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The low-value imported goods tax is being reviewed

The payment of GST on ‘low-value imported goods’ is to be reviewed by the Board of Taxation in order to ensure the tax, which was implemented in 2018 to give local brands an even playing field with international rivals,  is operating as intended.

Prior to 2018 goods imported directly by consumers valued at under $1,000 didn’t attract GST.

“Australia was one of the first countries in the world to impement a vendor model, requiring suppliers, online platforms and re-deliverers [to] collect and pay GST to the ATO,” said Assistant Treasurer Michael Sukkar.

The Board will asses the effectiveness of the scheme, and provide advice to the Government regarding its ongoing operations by 17 December 2021.

BDO Australia Tax Partner Fady Abi Abdallah said the review was welcome, as the scheme has led to an increased level of compliance among international suppliers.

“We have also noticed an increase in activity by the Australian Taxation Office with targeted notices sent to a range of international suppliers alerting them to their Australian GST obligations,” Abi Abdallah said.

“The ATO activity, along with increased supplier awareness is resulting in increased supplier compliance and is assisting in levelling the playing field for Australian suppliers. However, many suppliers are still unaware of their Australian GST obligations and some confusion still remains, particularly in relation to re-deliverers and supplies made through electronic distribution platforms.”

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