Australian Consumers Will No Longer Be Able To Purchase From U.S. Amazon Store Thanks To A New Tax Rule

Amazon, Australia, GST tax, Amazon Tax
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For Australian consumers, the choice is simple when it comes to choosing between Amazon.com.au and Amazon.com. The Australian version of Amazon has approximately 60 million products, whereas the U.S. site has close to half a billion products to offer.

For example, for those who are fans of reading books on their Kindle devices, quite often new books are not available in the Australian store. And, up until July 1, Australian Amazon users will be able to select the U.S. store as their preference over the Australian one and, therefore, be able to purchase a much wider array of items.

However, come July 1, Amazon will now be shutting the doors for Australian consumers to access their U.S. website. They will also not be shipping items from the U.S. to Australia at all.

And why?

Because the Australian government is inflicting a Goods and Services Tax (GST) on Amazon in an effort to get the retail giant to pay taxes on products purchased in Australia that will come from overseas.

According to The Sydney Morning Herald, local retailers had “lobbied for the 10 percent tax to apply to all goods purchased from offshore retailers — not just on those greater than $1,000.”

Amazon, Australia, GST tax, Amazon Tax
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The new GST rule — unofficially dubbed the “Amazon Tax” — has come into effect after heavy lobbying by local retailers to cover all sales, including online purchases, in an effort to “even the playing field” for local retailers.

However, Darren Price, a Sydney-based tech writer, points out that, up until this point, Amazon has provided a variety of items not previously available to an isolated country such as Australia.

As of July 1, when the new rules come into effect and Australian consumers log on to Amazon, they will automatically be redirected to the Australian site.

“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” an Amazon spokeswoman said in a statement, according to News.com.au.

Australian Treasurer, Scott Morrison, was excited about the change.

“The second biggest company in the world, run by the richest man in the world (Jeff Bezos) shouldn’t get a leave pass from paying tax in Australia. If multinationals aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia.”

Morrison also stated that other countries are adopting a similar model of taxing the vendor in relation to overseas companies.

While other countries may be adopting this model, many people are now turning to other options to ship items from the U.S. Amazon store. The technology currently exists to mask locations online. Australians are no stranger to these services after all since before Netflix expanded into Australia, they would access the service using proxies. They then continued to do so even after Netflix arrived in Australia in order to access the wide variety of shows not offered on the Australian version.

Amazon has curbed this sort of behavior by not shipping to Australia from their U.S. store at all. Therefore, the prediction by Scott Kilmartin, a retail and e-commerce adviser, is that Australians will now turn to “third-party logistics companies that consolidate orders and ship them to Australia.”