Tuesday, 27 June 2017 06:02

‘Netflix Tax’ set to hike cost of imported digital products, services by 10% Featured


The federal government’s new tax — dubbed the "Netflix Tax" — on imported digital products and services comes into effect next Saturday, 1 July, pushing the price of goods and services up by 10%.

Imposition of the GST charge will hit Netflix subscribers, and subscribers to others services like Stan and Foxtel, as well as pushing up the cost of many other services.

The GST charge on imported digital products is being imposed by the government concerned by overseas companies by-passing Australia's GST regime which currently excludes so-called “intangible digital products”.

Comparison website finder.com.au says when the tax takes effect digital products and services will incur a 10% tax, the same as any tangible product or service.

And the tax has been broadened to capture a range of other products and services bought or delivered overseas by Aussies.

According to finder.com.au imposition of the new tax will see the cost of using Netflix set you back $9.90 for the basic plan (standard definition, one device), $13.20 for the standard plan (high definition, two devices) and $16.50 for the premium plan (ultra high definition. four devices).

And, finder.com.au compares the Netflix charge with Stan and Foxtel.

It notes that Stan will still set you back $10 per month (three devices, high definition) and Foxtel Now will cost you $10 for its smallest package (or $15 per month to include Game of Thrones and Westworld in high definition on two devices at a time).

As Treasurer Scott Morrison said when the bill imposing the charge was first introduced, the 10% will be applied to all digital products including smartphone apps, songs, podcasts, e-books and games purchased overseas by Australians.

And it will apply to imported services like consultancy and professional services delivered offshore for Australian customers.

The ‘Netflix tax” is expected to raise $350 million over four years from July 2017.

The federal government will distribute the spoils between the states and territories.

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Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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