Next on Netflix: GST

Treasurer Joe Hockey has agreed to strengthen the “integrity” of the GST so it catches music and movie downloads from overseas providers such as Apple and Netflix.

Following a meeting with state treasurers on Thursday, Hockey said they agreed to increase efforts to apply the GST to goods imported online which, under the current tax rules, when valued less than $1,000 are exempt from GST.

“I see this as an integrity measure, not a broadening of the GST of a deepening of the GST,” he said.

The AFR reported Hockey explained taxing downloads and media would generate more revenue.

“The states agreed in principle that we should move in that regard,” Hockey said.

“I have offered to work as quickly as possible with them to introduce legislation to address that.”

Imposing GST on international online retailers was initially proposed by assistant treasurer Josh Frydenberg last year when he said domestic retailers face “a reverse tariff”.

“It is not fair to taxpayers, or to retailers or their many employees, to exempt overseas online retailers from the GST even if some consumers are enjoying the ride,” he said.

US content streaming platform Netflix launched in Australia last month, breaking into the market with pricing starting at $8.99 a month – a full $1 less than its rivals.

Not charging its Australian customers GST gives Netflix a 10% cost advantage over local competitors like Stan, Presto and Quickflix.

Frydenberg wants all multinational companies selling into Australia online to be captured by the tax system and establish a “level playing field”.

Last week it was reported Hockey was considering implementing a “Google Tax” similar to the UK’s diverted profits tax which targets profit shifting tactics used by multinationals.

There’s more here.

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