The ATO appears to have prepared itself for a firm implementation of the new law imposing GST on consumer purchases from overseas valued at $1000 or less.
Complying online retailers are being assured that their non-complying competitors will be taken to task: ‘Businesses that do the right thing and register for GST can be assured that we will, where appropriate, pursue businesses that do not,’ said ATO Assistant Commissioner Kate Roff. (Presumably with helpful input from GST-collecting retailers!)
This applies to international retailers if they have a GST turnover of $75,000 or more in a 12-month period, or if they sell from an electronic distribution platform such as Ebay.
A press release issued this week by the ATO outlines the measures it is taking to give the new law some teeth.
‘The ATO has the ability to use financial data tracking, customs data and online investigations to identify those that are not meeting their taxation obligations,’ said Kate Roff
‘Businesses that decide not to comply will face penalties.’
The ATO website outlines what those penalties will be, depending on the level and consistency of non-compliance Actions include:
– registering you for GST;
– imposing an additional 75 percent administrative penalty, which then becomes legally payable;
– intercepting funds from Australia that are destined for you;
– registering the debt in a court in your country;
– requesting the taxation authority in your country to recover the debt on our behalf.
The ATO also has re-deliverers in its sights. Re-delivery service providers like mailbox re-delivery and personal shopping services will be subject to similar registration requirements as online retailers.
‘Consumers using GST–registered re-deliverers will pay the applicable GST to them.also,’ the ATO states.
A simplified system is available for businesses to register, lodge and pay Australian GST. Retailers using this system will only need to report Total Taxable Sales and GST, and pay once each quarter.
In an interview with The Australian, ATO deputy commissioner in charge of indirect tax, Tim Dyce (pictured right), made the tax collector’s position even firmer. He said that international retailers would risk the full weight of ATO enforcement tools: targeted audits, liability for uncollected GST, and penalties.
‘From July 1, we will risk-assess those businesses that haven’t registered,’ he said. ‘Where they should be complying, we will actively engage with them to register, apply, collect and remit GST. If they continue to act contrary to the law, we will take the necessary compliance action.’
Instructions on how to register in the simplified GST systems for international business can be found at ato.gov.au/GSTSimpleReg.
The ATO estimates there is a pool of around 3000 retailers who may need to register.