GST Issues Could Hinder Aussies from Shopping on eBay

Howdy !

Are there people in Australia buying your products on eBay?

It looks like your future with them is indefinite as eBay might block Australians from buying from foreign sellers because of Australia’s new tax laws.

eBay refuses to comply with the 10% tax which the Australian government is imposing on imported goods sold online, calling it complex and unworkable.

Australia’s new tax law, which takes effect on July 1, requires online businesses that sell more than $75,000 worth of products in the country every year to charge GST.

Australian Treasurer Scott Morrison says this will ensure a level playing field for local businesses that aren’t exempted from GST unlike their competitors overseas; only foreign packages with a value over $1,000 are currently charged GST.

However, eBay thinks of the proposed legislation as impractical since the current business models of online marketplaces do not support the collection of GST.

They have to extensively reorganise their business models before they could adapt the GST changes.

In a submission to the Senate Economics Legislation Committee, Jooman Park, vice president and managing editor for eBay Australia and New Zealand, wrote:

“No tax would be paid to Australia and none would be owed. It would raise no revenue, deny Australians access to choice and lessen price competition. This solution would not even represent a win for bricks and mortar retailers, because Australians would still find ways to buy online.”

 

Third-party marketplaces are not sellers

eBay also cleared up a misconception in the legislation which referred to it as a “seller” and an “electronic distribution platform”, for it is neither.

To clarify this, Park explained:

“eBay is not a seller. eBay does not own the goods, does not handle payments and it does not distribute anything. eBay is a third-party online marketplace that simply connects buyers and sellers.”

Though he acknowledges that there are some marketplace-style business models wherein the marketplace is also the seller, Park stressed that “eBay does none of this.”

He stressed that deeming eBay to be a seller is “a fiction designed by the Government to give the impression of raising revenue.”

eBay polled 1,000 Australians and found 59% of them did not support the bill.

If eBay decides to restrict Australian customers to buy only from sellers in their country, will this affect your business?

We hope to hear from you in the comments.

To your continued success,

Dave & Matt   

 

 

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