The professional networking site LinkedIn will start charging GST from the start of the 2017 calendar year.
The site sent messages to premium subscribers yesterday, saying the move is in line with changes to Australian tax regulations.
“We will start charging Australian Goods and Services Tax (GST) at the rate of 10% to our customers effective 1 January 2017,” the message said.
The federal government wanted change to ensure local commercial websites, which have to pay GST, are not disadvantaged against overseas competitors.
The new rule applies to companies with sales in Australia above $75,000. Companies being targeted by Australian regulators include EBay, Amazon and United Parcel Service.
Companies such as LinkedIn, which provide a service to Australians, but whose company is based offshore, have in the past avoided charging GST. The basic monthly premium charge is $29.99 in Australia.
However, LinkedIn help now says: “The GST will be identified as a separate line item on your receipt, in addition to the product purchase price. We suggest that you consult your tax advisors or local tax authorities on the implications of GST.”
According to the this year’s federal budget papers, GST will be extended to low value goods imported from July 1, 2017.
Currently good under the value of $1000 escape GST. The measure is estimated to bring in $300 million in extra tax over three years.