Monday, 17 July 2017 15:14

Skype to pass on 'Netflix' tax

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Users of the paid versions of Skype or those who purchase Skype credit will be required to pay the 10% Australian goods and services tax from 1 August.

Skype  is best known as one of the first free peer-to-peer voice-over-IP (VoIP) services launched in 2003 by the creators of the music-sharing app Kazaa. It was later bought by eBay and then in 2011 by Microsoft.

Microsoft has been busy moving it from peer-to-peer to a centralised Azure cloud service which has allowed increased functionality in the free app for Windows, Linux, iOS, MacOS, and Android. It also allows closer integration with Microsoft Windows and Office 365.

Skype Credit packages range from $5 per month (to be $5.50) for 100 minutes to mobiles and landlines to $25.50 for unlimited calls to 63 destinations.

Skype will delay charging the increased GST until 1 August (it will pay the GST during July). From 1 August, the subscription price will change to include the GST rate of 10%.

Skype sent an email explaining this to its registered users based on their country “domain” address so not everyone is aware of the changes. Obviously, the vast majority — free users — will not be affected, but it will also apply to Skype for Business and enterprise users.

“If you do not agree with this change, you can cancel your subscription prior to 1 August 20‍17,” the letter advised customers.

There is some controversy over the “Netflix tax” as no physical goods change hands, but both Netflix and Stan have raised prices accordingly.

Comms forum Whirlpool sums it up well. “It is a service provided for a fee in Australia which attracts GST. It is not another new tax, it's just that the government is now insisting foreign companies charge the tax in the same way that Australian companies are required to do. You must pay the GST.”


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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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