Amazon Disconnects From Australia After Government Hits It With 10% Tax On All Imported Items
from the ten-percent-of-nothing dept
Having tried and mostly failed to regulate Wild West internet commerce, legislators have now decided to take a more “hands off” approach to the intersection of communications and commerce. That’s what I would be writing if we lived in a world where people learned from their mistakes. But they don’t. Whatever has failed a half-dozen times in previous iterations can be rebooted, doubled-down on, and otherwise presented as a legislative solution for a “problem.” And this “problem” is always the same. Incumbents who have somehow managed to parlay their fortunes into a “disadvantaged” position want tech companies to give them (or their government) money.
Link taxes — otherwise known as “Google taxes” — supposedly would allow publishers to recoup their “losses” from having Google send traffic their way. These haven’t worked, and in the worst case scenario, Google has simply shut down its Google News service rather than pay for the privilege of referring traffic. Other attempts to make things “fair” for brick-and-mortar businesses competing with Amazon have led to similar outcomes. In one case, the French government decided Amazon could no longer offer free shipping on books to France. Amazon obliged, raising shipping to $0.01 Euros.
The Australian government has decided to go down the road well traveled and charge Amazon extra for beating local retailers at their own game. A new law goes into effect at the beginning of July which charges Amazon 10% tax for every imported good sold to Australians. One of the backers of the bill is retailer Harvey Norman, which had this to say about Amazon.
“They think they have the right to pay no tax in Australia,” Harvey Norman’s executive chairman Gerry Harvey said on Thursday of Amazon’s decision to “blacklist” the country.
“They’ve done the dirty on the government. They’ve done the dirty on the public.”
And what is this “dirty” Amazon is accused of doing? Nothing more than deciding the beneficiaries of Australian tax dollars — mainly Australians and Australian merchants — should pay the 10% tax. In response to the new law, Australians have been cut off from Amazon’s main feed.
Amazon said that Amazon.com, its American website, and other overseas sites would no longer ship to Australian addresses from July 1.
Shoppers visiting those sites will be redirected to Amazon.com.au, which launched late last year and stocks about 60 million products, compared to almost half a billion on its US site.
There you go. The “playing field” has been levelled, as proponents like Harvey Norman requested. Local retailers will now only compete with Amazon’s local site. How much “fairer” could it get? And yet, they’re complaining that the level playing field is also “doing the dirty.”
Australians aren’t happy about this. The limited selection they’ll be forced to purchase from doesn’t give them nearly as many options as Amazon’s US site. The playing field is so level all Australians will be frustrated equally with their inability to source obscure goods and/or the hassle of using reshippers to get products local retailers don’t carry.
“Australians are very isolated and it’s the likes of Amazon that have enabled consumers to have more variety, said Darren Price, a Sydney-based tech writer.
“Otherwise you end up waiting for whenever Harvey Norman is going to get it in stock.”
Mr Price – who spends about $500 a year on Amazon.com, mostly for computer components that aren’t available locally – said he and many other Australians would likely get around the blockade by using package redirection services, which receive orders shipped to addresses in the US and then forward them to Australia.
In their desperation to punish Amazon for being successful, retailers like Harvey Norman have only managed to piss off customers already unhappy with their lack of selection. This mistake was compounded by the Australian government, which decided that tagging Amazon with the tax (rather than shippers or purchasers) would “cause the least disruption to consumers.” I guess no one thought maybe a discussion with consumers might help define what is or isn’t disrupting. Punishing one large company to help another large company really doesn’t do anything but hurt consumers.
Filed Under: australia, e-commerce, tax
Companies: amazon
Comments on “Amazon Disconnects From Australia After Government Hits It With 10% Tax On All Imported Items”
Whatever has failed a half-dozen times
Well, he failed much more than that. Then he threw a hissy fit and resurfaced as MyNameHere.
Re: Re:
Well done sir.
Re: Re: Re:
Since you guys like to constantly reference him, it appears to me that he has won more than you think.
Re: Re: Re: Re:
His (your) idiocy is legendary.
Nice try wiLLie.
Re: Re: Re: Re:
He’s won, all right. He’s won the Techdirt equivalent of the Darwin Awards.
His post history, as is the one for MyNameHere, can be found with a quick search of this site. If you look at that and can think “he’s won”… whatever makes your John Steele-flavored erection happy, chubby.
Re: Re: Re: Re:
Slonecker? Is that you?
When I was in Australia, I paid their tax. With American bills!
So why shouldn’t Amazon be forced to fund the tax system? HMM? Why does Techdirt exempt mega-corporations from the current economic system?
YES, (I answer wearily to the “libertarians” and other freetards) PEOPLE pay ALL the taxes. However, what Techdirt minion is arguing above is that Amazon and filthy rich shareholders make out even with even more undeserved free income. How is making the rich even richer a solution?
BTW: Amazon has made less profit TOTAL in all its years than Apple does now in any given quarter! What exactly is Amazon running on? It has some supply of FREE money already! Let’s TAX THE HELL OUT OF IT FOR OUR BENEFIT!
Re: When I was in Australia, I paid their tax. With American bills!
Why should Amazon be an unpaid tax collector for goods imputed into Australia, especially as their customs service can levy and collect the taxes before letting the goods out of customs.
This tax was driven by a corporation deciding it cannot compete, and so getting a law passed to try and cripple its competition.
Re: Re: When I was in Australia, I paid their tax. With American bills!
This is the real issue. These countries want money from companies like Amazon and Apple, but they don’t want the cost of goods to rise.
Re: When I was in Australia, I paid their tax. With American bills!
“So why shouldn’t Amazon be forced to fund the tax system?”
It works the other way around dope.
An Australian company wouldn’t pay state/local/Gov taxes here.
I won’t address the rest of your verbal diarrhea wiLLie.
Re: When I was in Australia, I paid their tax. With American bills!
Maybe if you used more capital letters and insults, you’d get your point across.
Re: When I was in Australia, I paid their tax. With American bills!
You realize that there are books that are in the public domain in Australia but not in America, right?
You fucking pirate enabler, blue boy.
Re: When I was in Australia, I paid their tax. With American bills!
Libertarian does not need scare or sarcasm quotation marks, though we won’t feel any less legitimate in our beliefs if you must refer to us in this manner. And ‘freetards’? What kind of person thinks a strong belief in freedom equates stupidity? Didn’t you read the post about the police blowing into breathalyzers and getting paid a taxpayer funded salary? And that kind of waste isn’t even a drop in the bucket compared to millions (or was it billions) that the Pentagon can’t account for (yes I know I’m including government waste from two different countries, I’m just more familiar with the US fraud) What percentage of tax dollars do you think the government spends appropriately and wisely? Do you really think the government will spend the money from taxing Amazon (or in any crazy tariff protectionist scheme that are becoming so popular) will be used in any manner that benefits the average citizen, or even the needy?
Certainly there are filthy rich shareholders who wouldn’t feel much pain if more money made it downstream in the company, and the fact that they are filthy rich brings out some jealousy that makes me feel they are undeserving. BUT, if it wasn’t for the shareholders taking the risk to invest their money, the business wouldn’t have reached success or even necessarily exist. And many, many shareholders are not the mega rich, they are the average person with a 401K or other modest investment account; no reason to hate on them for trying to grow their savings for retirement. The disgusting rich shareholders are better insulated from risk and invest in start-ups and finance the next big advancement. And as much as we like to paint them as greedy Scrooges, these people pour tons of money into charitable and philanthropic causes.
And if you really want to go after the filthy undeserving rich, this is the wrong kind of tax. This kind of tax will be paid for by the consumers, one way or another. You want a tax on investment/ non-wage income. We freetards understand economics better than the Sheriff of Nottingham it seems….
Re: Re: When I was in Australia, I paid their tax. With American bills!
I’m more amused by the fact that out_of_the_blue has regularly complained about expanding globalism. He whines whenever issues involving countries that are not-America are profiled on Techdirt, claiming that it’s an affront to Trump. So why the fuck would an American citizen be this concerned about paying Australian taxes?
It’s almost like he’s proven for the millionth and third time that he’s routinely full of shit, to the point where it’s leaking over his mouth.
GST is a tax on the consumer, not on amazon. They’ve just decided it isn’t worth their time to collect it
Re: Re:
Just No. RTFA.
Re: Re: GST
The goods and services tax applies to most goods and services sold in Australia, and requires businesses selling them to collect it on behalf of the Government.
Asking Amazon to collect it is bringing it into line with other Australian businesses.
Many, many, many people in AU think the govt should collect its own taxes, but there you go.
Re: Re: Re:
Actually yes. Amazon were being asked to collect tax and pay it to the Australian government, just like most sales tax systems.
Re: Re: Re: Re:
Considering Australians already pay this tax on import (of goods valued over AUD $1,000) via the courier transporting it, this is quite an obvious Amazon-targeted change.
Re: Re: Re:2 Re:
No, it is not an Amazon tax or a tax levied on Amazon. It is an attempt to shift the point of collection of an existing tax, the 10% Goods and Services Tax (GST), the same type of tax as the EU regions VAT (Value Added Tax), from the Customs Service at the border to the point of origin seller, exactly as it already is for Australian-based businesses.
To collect monies like a 10% GST at import time is quite expensive. First, Customs has to assess the value of the package, so they have to read any invoices and so on. If they determine there is duty to pay, then they have to place a hold on the parcel. Once the decision is made on how much to collect, it has to then be collected. So a bill has to be issued, the receiver has to then pay it, whether in person (which involves more expense as someone has to be there to receive the payment) or electronically, then it has to be accounted for, audited and whatnot. Then the package has to be released.
Until recently, the GST on imported goods was only applied if it is valued at over AUD$1k, because the cost of collecting the tax on goods under that figure is more than the revenue gained in collecting it. Therefore, reasonably, they elected to not charge it in that situation. So where it makes financial sense – more is collected than the costs of doing so – it is collected at import time.
However, the bricks-and-mortar stores started whining about the unfair competition, since those imports (of less than AUD$1k) aren’t charged the 10% GST, thus they are at least 10% cheaper than any Australian-based store could possibly sell it for. The government has given in and decided to start charging that GST – even tho it will cost the government more than it will earn in revenue from collection, just to shut them up (although they’d argue it’s to make a fairer playing field).
In an effort to avoid that collection expense however, where it costs more to collect than the revenue derived, they are trying to pass the cost of collecting it (in all cases, not just below AUD$1k) to the sellers of the goods. Basing it on the not illogical conclusion that it will be cheaper for the sellers to collect it as part of the up-front payment – simply adding an additional 10% to the bill – than it is for the Australian Customs Service to have to levy it and then collect it at import time.
However, what might make financial/economic sense for the Australian government, does not necessarily make it so for the entities – foreign entities at that – to accommodate.
So international Amazon has decided that they want no part in the process. As is their right. And to save any legal hassle – which I believe they’d win, but it’s still a hassle to go through – they’ve just removed the situation entirely by not shipping to Australia at all anymore. In the same way many companies have just blocked EU residents rather than wanting to deal with GDPR.
Re: Re:
Basically this. While there is a lot to be said about the success or otherwise of bringing in the GST as a way to reform the tax system, it isn’t an ‘amazon tax’ as much as the government seeking to get more businesses to collect it.
I am not saying this isn’t problematic, but this article has misrepresented the situation.
MultinationalsSubsidizeOffCommunities
It’s government’s trying to grapple with online vs. the decimation of local retailing, lost tax bases, unemployment, homelessness and all the needs of any city trying keep services and infrastructure operational.
I’m not taking Amazon’s side.
Their headquarters are a couple of freeways away. Every night is news about something something Amazon, person’s exploited in their warehouses, gentrification their alleged tax avoidance schemes et. There’s a local public radio station that has a segment focused solely on the going’s on of Amazon and from what I hear warning against cities vying for Amazons 2nd headquarters based on what they do or most importantly don’t do for community.
What it comes down to is the past behavior or social contract that businesses used to have with communities.
They used to help pay for infrastructure, hell Microsoft paid for the construction of freeway onramps/offramps, traffic lights, built bridges across freeways to ease local traffic … from Amazon look for anything they’ve done for community, anything…
From my view, Amazon is a taker.
The head tax being pushed on Amazon HQ, which I feel won’t pass, isn’t as much about taxing as sending a message to this nightmare of a company that doesn’t accept it’s responsibility to the communities they operate in.
Ask Mr. Bezos how he plans to spend his wealth, I’ve heard nothing in his statements reflect community. But hey, rockets in space for the elite to vacation is definitely on his agenda.
What these big corporations are doing is subsidizing their profits off the backs of community, which is decimating local economies, services, infrastructure updates, et.
Australian government, whatever their actions, is right to attempt to bring to light the failings of multinationals and Amazon is at the top of food chain for what needs intervention.
I see this as a discussion between government and local business. Government has made a play, now local business can react and work to fill in the product gaps.
Re: MultinationalsSubsidizeOffCommunities
Re: Re: MultinationalsSubsidizeOffCommunities
If the wealth is ill gotten gains, then it becomes relevant.
As a matter of social decorum, it’s relevant to all of us. A society can’t survive if everyone decides to be a taker. It doesn’t matter if you are Bezos or just one of his employees.
There should certainly be strong social pressure among Bezos’s peers in his own city regarding this. Otherwise Seattle is a cesspit.
Re: Re: Re: MultinationalsSubsidizeOffCommunities
Re: MultinationalsSubsidizeOffCommunities
I agree. Amazon is a megacorps that needs to be treated with much more scrutiny. I don’t think that this tax is one of the best ways to go about dealing with Amazon, but I’m with you in that things such as the monolithic nature of the company, the workers exploited in their fulfillment centers/warehouses, and the way that they have these big cities putting on a song and dance and offering sweetheart deal tax breaks for HQ2 (that may very well harm the city more than help it) need to be addressed.
Re: MultinationalsSubsidizeOffCommunities
“They’ve done the dirty on the government. They’ve done the dirty on the public.”
Oh shit… watch out… on the government is allow to “done the dirty”
Who cares if the Australians want their elected officials to fuck them over, let them.
“You get the politicians you deserve.”
~Obama
Having a hard time getting worked up about this
I’m having a hard time getting worked up about this. Presumably local retailers in Australia are collecting Australian taxes already, making them “unpaid tax collectors,” too. Just like every other employer and retailer in every other industrialized country. Unless you subscribe to the theory that doing something online should somehow make it inherently tax-exempt, this seems like a big nothingburger to me. (I’m going to ignore for the moment the fact that so much of Amazon’s historical growth has been built on facilitating large scale tax evasion by people who didn’t pay state and local sales taxes.)
On the flip side, Amazon can respond to requirements to collect and remit taxes in whatever way it wants, up to and including withdrawing from a market completely. They are not obligated to sell to customers in any given country. And the response they chose seems like a fairly reasonable way to manage what I assume is a wide variety of different local requirements they presumably have to deal with. Yes, it’s a shame that it will be harder to buy certain products in Australia from now on, but that’s just a fact of life living in a small country on the other side of the planet from the EU and North American markets.
So what am I missing?
Re: Having a hard time getting worked up about this
Re: Having a hard time getting worked up about this
I’m going to ignore for the moment the fact that so much of Amazon’s historical growth has been built on facilitating large scale tax evasion by people who didn’t pay state and local sales taxes
If doing something online makes you inherently responsible for the crimes of others, then I’m perfectly happy making doing something online be inherently tax-exempt.
But ignoring that, there are several issues that people might find important here.
One is simply that government is explicitly passing laws targeting certain businesses and favoring other ones, simply because they can. Some people think the government should act in a neutral manner, or at least in intra-industry neutral manner.
Since every import already goes through customs, and the government (being the one who writes tax law) already knows exactly how taxes should be assessed, some people would question why the government isn’t dealing with this themselves. This speaks to a broader question about the current tax model in which the government tells everyone else to interpret tax law, then punishes them for interpretations the government deems "wrong." The rise in ecommerce (which drastically increased the number of relevant tax jurisdictions), and some shenanigans a few years ago between the IRS and the US tax prep industry, has exacerbated this in certain circles.
Others would relate attempts like this to stifle internet commerce on behalf of incumbent industry players, with attempts in the US to stifle internet media on behalf of incumbent players, with attempts in the EU to punish google on behalf of incumbent news companies, and point out that this is very likely to fail to achieve its goals, that its goals may or may not even be desirable, and that if difficulty in acquiring certain products is "a fact of life living in a small country on the other side of the world from the US" then we should be attempting to fix that problem, not attempting to retain the status quo.
Re: Having a hard time getting worked up about this
In the end, in international sales, the Point of Sale is not the proximate event that triggers tax due, but rather the import into Australia. That makes it far less reasonable to require the seller to collect and remit the consumption tax.
But beyond that:
Its that problem of internet scale that lots of people fail to think about. See, here in the states we’ve been having this debate. A lot of people like to claim if you buy out of state you are tax exempt. Except, you are only exempt from the seller’s state sales taxes. You should be paying use tax. Why? Well society at some point agreed that the retailer should collect the consumption tax at the time of sale, because it is the most proximate nexus to the sale to collect the tax and buyers often wont self report those taxes (use tax is rarely paid). But because it is incredibly hard to adhere to the 10,000+ tax jurisdictions in the US, you generally only collect taxes in your own state, to limit the burden. Some states are anathema to wide distribution, with use or even sales taxes being paid to individual jurisdictions, State, County, Local, and Special tax districts, all with different rules as to what is taxed and how much. No central repository of information about this data even on a state level is available.
Why do I mention all of this? Because one we start adding other countries to the equation it gets worse. You have no issue with amazon, because yes, if they wanted to, they could. But this tax, which has an Australian controlled proximate event crossing the border, affects more than Amazon. It effects everyone. And there are small niche suppliers for whom this process would be crippling, as shown by the few products available for sale on Austrailia’s Amazon website. Scale.
Its the same issue facing sales tax everywhere initiatives in the US. Its a cost prohibitive process in one state, its markedly worse one over all 50.
This is an import tax – it will add a 10% levy on all imports which would have included Amazon. It is not Amazon not gathering local VAT.
The Quote from the Sidney Morning Herald: “The move is seen as a win for local retailers which had lobbied for the 10 per cent tax to apply to all goods purchased from offshore retailers – not just on those greater than $1000.”
I hope the local retailers are happy…
Re: Re:
I hope the local retailers are happy…
Yeah, here’s hoping they come to dearly regret that. I know if I was an australian that just got screwed over I would make a point to never buy from them if at all possible to return the favor.
If people were willing to wait for overseas shipping rather than just buy locally that says more about the local options than it does Amazon.
Re: Re: Re:
Of all the horrible things the current Aussie Government has done, this ranks so low on the scale that it is barely noticeable. The local retailers just wanted that if they sell item x, and have to collect a 10% tax, that anyone else selling the same item to the same customer also collects the same 10% tax. They are not asking for anything they aren’t already doing. This isn’t the local retailers saying “It isn’t fair. They are outcompeting us. Tax them.” This is “It isn’t fair. We have to collect this tax and they don’t”.
As to shipping, I’ve had two new people start with my business in the last two weeks, and one of the first things I told them was to know the difference between things we need and things we need now. If we need something now, I go to the local hardware or electronics store, and they have it now. If we need something, but not yet, we get it cheap online. Waiting isn’t that hard for most things (that’s a premise behind things like kickstarter, too).
As to the local options, a small local retailer doesn’t have the same economies of scale, and has higher overheads (relatively speaking) than someone like Amazon. This will usually mean that their prices are higher. There are times when the premium is worth paying, and times when it isn’t. That’s fair enough. But no one in these comments has yet even gone remotely close to explaining why the tax shouldn’t be levied if I buy off amazon or ebay but it should be if I buy off the local retailer’s website.
Re: Re: Re: Re:
How about the fact that they are American and not Australian based companies and that they aren’t bound by other countries’ laws? If I buy from a local website in Australia and have it shipped to America, I don’t have to pay any additional tax, nor does America force that website to collect a tax and pay it to the US.
This is no different than Google pulling out of Spain because it was stupid for them to pay link taxes. It’s stupid for a foreign company to collect taxes for a country they aren’t based in.
Re: Re: Re:2 Re:
Nah, not buying it. Let’s say, for example, that Amazon was shipping a medical device to Australia. That medical device must comply with TGA regulations, not FDA.
Let’s say they were selling a copyrighted piece of work. They must have Australian distribution rights. Having American distribution rights is irrelevant in this case. (As is what we think of copyright in general)
Let’s say they’re shipping some biological materials. They comply with Australia’s quarantine and biosecurity laws.
Let’s say they’re selling cigarettes. They comply with plain packaging legislation.
They want to trade in Australia, they follow Australian laws, or they fuck off. Ebay decided to follow it. Amazon decided to fuck off. Fine either way. It is only stupid to collect taxes if they think they won’t recover the marginal costs involved. I’d be surprised if their margins are that tight that they can’t make the change while still making a profit on the goods they are selling. I think it is more that Amazon are trying to play a con game to try to convince people that they are right and the tax is wrong.
As to Spain and Google it is similar but different. In the link tax case, the change was one they have no real mechanism to charge for to cover the direct costs of the tax, and so this meant that there is a good chance they would make a loss on the activity rather than a profit. All Amazon needs to do is add the GST at checkout, and the direct costs are covered.
As to “It’s stupid for a foreign company …” It’s stupid for a country to impose a consumption tax and then only charge on some actors and not others for the same product.
Link Taxes make about as much sense...
as charging someone a fee because they looked your number up in a phonebook before they called you. (yea I know – I’m old and remember phonebooks)
Re: Link Taxes make about as much sense...
I also remember phone books, the local phone company still leaves one on the doorstep every year. Its a legal requirement actually.. <Grins>
Re: Re: Link Taxes make about as much sense...
Yeah ain’t it great we have to throw away their garbage each year. Just like junk mail the company basically just paid money to the post office so that I have to dispose of their garbage
Re: Re: Re: Link Taxes make about as much sense...
I don’t mind it. It is full of kindling for my grill/firepit.
The first two paragraphs have no relation at all with the new tax.
It is just some random rant.
This new tax just recognizes that it is much more simple to anyone import goods from overseas.
And now it is just being applied the same tax to everyone.
Amazon is probably just threatening to leave, while hoping that the backlash will be enough for revert those changes.
I bet it won’t, and they will just comply with the new law in July.
It would be more expensive for the government to handle this tax collection.
If I remember correctly, eBay already collect the import taxes on the purchase.
While it is an extra cost for the companies (although probably insignificant), it makes a better buying experience.
Charging the customer when the package arrives would delay their arrival and make the customer upset that they have to still pay an extra.
Putting the tax on the beginning makes it easier for the customers compare if it’s is worth import or buy locally.
Re: Re:
The “new” tax is an extension of the existing 10% import tax lowering the baseline from $1000AU to ALL GOODS from overseas.
Amazon is not leaving AU, it has established a new store there. The store has a reduced number of offerings, which is natural considering they will not be selling imported items.
The headline for this story grossly exaggerate the situation – the bottom line is that Australians will now have to buy from the Australian version of Amazon.
Re: Re: Re:
Correction on the above; it is a levy on all RETAIL goods, not all goods.
Re: Re: Re:
My mistake for not being clear enough.
I still think that amazon.com will still cover Australia after July.
If not, they are just shooting themselves in the foot.
Re: Re: Re: Re:
Amazon.com.au will ship to Australia. Amazon.com won’t.
Amazon must think that doing international business with Australia isn’t worth the tax.
Re: Re: Re:2 Re:
They could stick 10% at checkout when doing the shipping. It isn’t that hard. The game they are playing is to try to stop other countries following Australia’s move.
Their hope is that we’ll blame the Government and the Government will cave. And then Europe or the US won’t do the same thing.
Re: Re: Re:3 Re:
Doing that for one market is no so difficult, doing it for every different tax regime is a software management nightmare, as it involves hundreds if not thousands of special cases at checkout.
Re: Re: Re:4 Re:
You mean like they do for shipping or for working out if they have distribution rights for that country?
Re: Re: Re:5 Re:
Those consideration only applied to goods marked Amazon prime, or fulfilled by Amazon, and many of those are likely shipped from Australian Warehouses, even if ordered from the US. Besides which Amazon probably has a regular logistic run from the US to Australia, so shipping is not that costly or difficult for them to deal with if they have to ship from the US.
Most of the goods on Amazon are shipped by the Vendor, who also manages pricing etc. So for Amazon to collect this tax is more complicated than you think, as they would have to adjust prices supplied by other to accommodate it.
Re: Re: Re:6 Re:
On Checkout
If DeliveryAddress.Country = Australia Then Tax.add(GST)
Alright, the coding maybe a tad more complex, but if their systems are that badly setup that they can’t handle it, they’re probably missing a few other taxes they have to pay and auditors should be picking that up.
Re: Re: Re:7 Re:
Add in add in the other local taxes, possible export taxes for the vendors country, and the necessity to keep all the rates up to date when they are changed, and your simple add 10% becomes thousands of lines of code dealing with special cases, along with the tax rate database and its maintenance. Also better send the tax details to the actual vendor, so they can get their receipt right.
One special case, not much of a problem, but several thousand special cases, as various cities join in the tax raising, well that is a very different problem.
Re: Re: Re:8 Re:
If you want to do business in a jurisdiction, you follow that jurisdiction’s rules. End of story.
That applies whether it is tax, IP, worker’s rights, auditing rules or anything else.
If they don’t like the rules, they can lobby for a change (because they will get huge amounts of sympathy wanting to play by different rules to everyone else), they can suck it up, or they can withdraw from the market.
Amazon have chosen to withdraw. Everyone else seems to be saying “this isn’t a problem”.
Re: Re: Re:9 Reeee:
No other country requires a trader to collect taxes where that trader is not an established business within that country. This is purely and simply extra-territorial law-making.
“but hurt” consumers
Butt hurt, indeed.
Don’t Tac My
Don't fall for Amazon's tantrum
This is an Amazon tantrum. The tax they will be collecting is the same as local retailers collect. It is the same as eBay, alibaba and anyone else will collect. (And eBay, alibaba et al’s response has been *shrug* no problem)
It isn’t designed to punish anyone, just to make sure the online retailers pay the same as local. GST is pretty easy to comply with. My micro business does so. I’m sure a company the size of Amazon can do so pretty easily, too.
The whole thing about the objection to ISDS is that if a company wants to do business in Australia, they follow Australian laws. If they don’t like it, they can fuck off. Most of the big platforms said fine. Amazon chose to fuck off. That’s fine too.
(And to those suggesting customs levy it, I can think of nothing worse in this space. They are already thinking of levying a $5 import duty on all packages to cover customs costs. This is a bad idea. We don’t want them to have more work that then leads to more costs to be passed on to the consumer)
Not sure if this article is willfully misleading or just ignorant. As a bunch of others have said, this is not a new tax. It’s attempting to apply the existing 10% Goods and Services Tax (basically sales tax) to online purchases. It previously only applied over $1000 because collecting the tax via customs inspecting packages isn’t cost effective. Paying someone $30 an hour to figure out the tax owed on that $2 eBay widget doesn’t make sense. If applied at the point of sale it’s automated and costs virtually nothing.
As far as Amazon is concerned, they already collect how many different sales taxes for different US states? And then remit that back to those state governments? They could easily do this if they wanted. 10% gets added at the checkout, goes into holding then goes to the govt, done. The fact that they won’t means that either it’s not worth their time, they’re playing political games, or they’d really like to push their local site.
Don’t misunderstand this, I’m not a fan. I’d much prefer that this not be a thing. But getting all hysterical about it is pretty unnecessary. Also FWIW eBay said fine whatever, we’ll collect your tax.
Re: Re:
Let’s talk about exchange rates… Does Amazon.com trade in Australian Dollars? Will their accountants maintain a set of books for each foreign currency? Will their bank?
You’re right, Australians already pay the GST-on-import, typically via the courier service employed. The law isn’t just a change from $1k to ALL goods, it’s also a change of who is responsible for levying it.
Will Amazon add Book Depository to the “disconnect”?
From what I gather the “reduced number of offerings” is a precipitous drop from roughly 500 million down to 60 million. That’s one hell of reduced number.
Gerry Harvey must proud of himself now that his continual whining and screaming and bleating has paid off.
Silly silly upside down people.
They’ve seen the awesome green grass on the other side of the imaginary fence, where they aren’t treated like knobs who will take what we want to offer & like it while everyone else gets to pick the toys they want.
Protectionism lead to the country being a backwater where content might arrive 2 years after release… they managed to finally get included in the same year… now after having gotten what they wanted they are being forced back into the backwater of you will get what we think is profitable and nothing else… you get no choices & you will like it and keep our doors open because competition is a bad bad thing.
Dudums
So what you are saying is that Amazon cannot compete on a level playing field. They need an exemption from the GST in order to be competitive.
Australians believe in a fair go and subjecting Amazons goods to the same tax as all other goods is a fair go, irrespective of how you portray the situation.
Re: Dudums
Taxing all goods as they pass through customs is providing the fair go. Requiring the extra-territorial business, Amazon.com, to manage its collection is not.
Free-Market Competition Will Win In The End
Leave Australia wide-open to a home-grown entrant to take over, will they?
Hmm, perhaps TradeMe could expand into there…
Australian commenter here, and I use Amazon. Let me set the record straight on a few things…
Firstly, it’s disappointing that Techdirt has bought into the "Amazon tax" narrative without mentioning that the tax applies to all goods sold by overseas merchants and shipped to Australia.
In Australia, the GST is a flat 10% tax across nearly all items. (Some things, like fresh fruit, are GST exempt.) But for items imported from overseas, GST would only be applied if the value of the item(s) was over $1000. If it was less than that, the government felt it wasn’t worth the time and money trying to collect tax on it.
10% tax on a $20 book really doesn’t make that much difference. The cost of shipping from Amazon US to Australia would outweigh any savings from tax. That doesn’t take into account currency conversion fees and exchange rates. If I compare items that are available in Australia to those on Amazon, Australian sites/stores are usually a little cheaper.
But much like the person quoted in the article, the reason I buy from Amazon is the goods – usually books – I want are not sold anywhere in Australia!
This is definitely being pushed as an "Amazon tax", but it will affect everyone ordering from overseas, including marketplaces like eBay or Etsy. The law isn’t very clear exactly how. The government can’t go after foreign companies, and it can’t exactly block foreign shipments without angering Australians either. It may well end up making the recipients pay the tax to receive their items. So that chocolate bar your grandma from overseas sent with a birthday card will be held at the post office until you pay the tax on it.
While I would support lowering the tax-free threshold to e.g. $100, all this really does is piss off consumers looking for items not available in Australia.
Amazon was not the right target for this campaign. Australians like Amazon too much to lose access to it. This will backfire. Furthermore, I suspect Amazon won’t be the only site that blocks Australian customers and this will lead to further blowback. The government won’t get any friends here, and retailers won’t see a magic boost in sales either. Everyone loses.
Re: Re:
The changes only apply to businesses with a turnover over $75k, so your granny sending a chocy bar isn’t going to be an issue (unless your Granny’s name is Jeff Bezos).
Importantly, this change is probably the least bad way they could implement it. Any other way would have resulted in far more chaos.
As to not being able to block foreign shipments, firstly yes they can. If they think Amazon, or ebay, or anyone else isn’t following the law, customs can hold the shipments until the taxes are paid. Secondly, Peter Dutton masturbates while reciting “Stop the boats” (apologies for that mental image, but if I have to suffer with it, so do you). If you think he wouldn’t stop the boats just because it has cargo he doesn’t care about rather than people he doesn’t care about …
Re: Re:
We have basically the same, only it’s 7.7% and with a tax-free threshold of SFR 65 (which actually includes the shipping cost; which makes it very, very expensive to import heavy goods).
Re: Re:
It’s similar in Canada. We also have GST, which is the Federal Goods and Service Tax. Though it applies to all goods and services, with a few exemptions, in the country regardless of origin.
When people shop across the border in the US, technically the customs officers at the border can force the payment of GST on those goods when importing into the country. Though most of the time they’ll let you through without payment as long as you declared the goods and it’s low enough to not justify the paperwork. But, if you head down to do a mini shopping spree and come back with a TV and bags full of retail goods, you can expect to spend the next 30 mins in customs with them forcing you to pay the GST on the full retail price of the goods.
I don’t know about Amazon in Canada, but I know that Steam currently collects GST on purchases.
Given the sheer amount of money Australia tries to exort from people, as the years pass, I’m getting more and more convinced that it’s actually an organized crime syndicate masquerading as a country.
Hell, maybe even the sixth family.
Re: Re:
Well Aust was first a penal colony for England…so there you go
This issue first cropped up when mail order businesses started and before we had computers. A mail order business could have a buyer in Texas, a warehouse in Arizona, and the actual company headquartered in New York. So what taxes are collected and who pays? With city, county, state, and federal taxes this obviously would have very quickly become a nightmare for businesses who would have to figure out taxes using a pencil and paper and then having to send checks to everyone via the post office. As a result the merchant is typically not required by law to add sales tax to the price of the goods, unless they have a physical presence in the customer’s state. Instead, most states require the resident purchaser to pay applicable taxes. When the internet came along online retailers fell under this same model. If Amazon does not have a physical presence in Australia then the customer should pay any sales tax to the gov. This leads to the argument as to what constitutes a physical presence but that’s another issue. Focusing on the main point the gov wants Amazon to collect and pay the sales tax since customers obviously don’t self report/remit these taxes they owe. While this seems easy, and computers certainly can help, it is still insane once you realize there are hundreds of thousands of rules for everything and they change constantly. Some countries may tax exempt food while others won’t. Some cities may while others won’t. Some will exempt food if it starts with the letter b and doesn’t end in an a but only on the 4th month of an odd numbered year. It is fing insane and they change all the time. So no. Asking Amazon to collect the tax is dumb.
Poor kangaroos.
Follow-up, why Techdirt supports Amazon: labor exploitation.
‘People Outraged After Amazon Found To Secretly Profit From "Unethical And Illegal" Chinese Sweatshops’
(Techdirt’s mighty filters childishly block links alternative views, so you’ll have to remove the space in link:)
https://www.zero hedge.com/news/2018-06-10/amazon-secretly-profits-unethical-and-illegal-chinese-sweatshop-make-your-echo
Oh, I’m sure the "capitalists" and foreigners who infest Techdirt will defend Amazon, so will just note that "Immediately" implies both that the report has substance and that Amazon had a position report ready for the press.
Techdirt ALWAYS sides against labor.
By the way, Amazon is just expanding on the Wal-Mart model. You should instead ask how a hick from Arkansas, the most backward state of the US, having literal hillbillies into the 70’s, became the center of a global empire.
#2: tax cheat in Australia, destroying NEW products in Germany!
"Berlin: Amazon `Not in Step With Our Times’ as Retailer Destroys Unbought Goods"
https://sputniknews.com/business/201806091065271876-amazon-germany-Destroys-Unbought-Goods/
KINDLE BOOKS
For years I had to track down obscure books via the national Library (out of state) Kindle solved most of this for me. Now with the new ‘redirect’ not only do get privilege of paying 2 or 3 times the Kindle Us price for my books I will have Australian publishers telling me what I can & cant read. Censorship at its easiest. Now I will only be able to read what Aussie pollies & Publishers agree is OK by them. The worst thing is having a note on your Kindle site saying Not Available To Australian readers.