Starting July 1, 2018, buyers in Australia will no longer be able to make purchases through Amazon.com. Instead, if navigating to Amazon.com, Australian shoppers will be sent to Amazon’s Australia site (amazon.com.au) instead. This change comes in response to a new Australian tax law that goes into effect that same day.
What’s this all about?
This change comes as the result of Australia’s Treasury Laws Amendment (GST Low Value Goods) Bill 2017. To make a long story short, the bill means that online sellers from overseas making a sale to a buyer in Australia who sell more than $75,000 in a 12-month period are required to collect Australia’s Goods and Services Tax (GST) from Australian customers on overseas purchases worth less than $1,000.
Further, much like US-based “marketplace sales tax laws,” this law considers the marketplace – and not individual 3rd party sellers – as the responsible party when it comes to collecting and remitting this tax. It appears that this step by Amazon is an attempt to avoid complying with the new law.
The bill was nicknamed “The Amazon Bill.” However, other marketplaces, like eBay, also expressed their displeasure with the bill, which would require them to collect Australian sales tax on behalf of customers who make purchases through the platform. eBay has not yet announced whether they will also discontinue sales to Australia when the law goes into effect on July 1.
The law goes into effect on July 1, 2018 even though, the Australian Federal Government’s Productivity Commission suggested that the law was likely to “hit online sellers with ‘significant’ compliance costs while collecting ‘modest’ revenue.”
What does this mean for Amazon 3rd party sellers?
Australian customers will no longer be able to purchase items sold on Amazon US. Instead, they will be able to purchase items sold through Amazon’s Australia site, which launched in December 2017. According to Australian website, CRN, Amazon has been busily adding items to their Australian site so customers will not feel the loss.
If you sell on Amazon.com, you may notice you no longer have sales shipping out to buyers in Australia. If you want to continue to sell to customers in Australia, you can now find instructions here to sign up to sell via Amazon AU. And you can find more information about selling in Australia in the Australian’s online shopping behavior and the impact of Amazon’s entrance guide from our friends at OFX.
Will this tax-related change in Amazon’s Australian policy going to affect your business? Start the conversation in the comments!