Australia: Your Digital Games (and Movies!) Could Be About to Jump In Price 125
dotarray writes with a snippet of news from Australia about expanded taxation for digital goods. From Player Attack comes the gist: Australians really are about to start paying more for digital services — including Steam games — as Federal Treasurer Joe Hockey has confirmed plans to introduce a 'Netflix tax' in this week's Federal Budget. As mentioned last week, this is not a new tax, but an extension of Australia's current Goods and Services Tax to include digital services, adding 10% to virtual items and services purchased online. Details have not yet been revealed, but potential services include not only Steam games but also Netflix subscriptions and even Uber trips.
even Uber trips?. (Score:4)
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Uber isn't collecting GST? (Score:4, Insightful)
It makes no sense at all if Uber isn't collecting GST. The GST is essentially a value-add tax applied to all domestic sales of goods or services. It doesn't apply to hobbies, exports, and personal imports up to a certain value. But I can't see any way Uber should be exempt from GST. It's clearly provision of a service for money, and hence subject to GST. Yet another way these goons think they can just avoid the law.
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It makes no sense at all if Uber isn't collecting GST. The GST is essentially a value-add tax applied to all domestic sales of goods or services. It doesn't apply to hobbies, exports, and personal imports up to a certain value. But I can't see any way Uber should be exempt from GST. It's clearly provision of a service for money, and hence subject to GST. Yet another way these goons think they can just avoid the law.
If you charge to drive someone somewhere GST applies. No special case for Uber. Source: ATO Canberra.
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Not sure how things work in Australia, but in Canada, you don't have to charge GST (same name, who would have guessed) if you make less than $30,000 in revenue. It's possible they could get around it by making the drivers individual businesses.
Although, I think that Uber rides really should be charging tax. They are already semi-illegal in many places. Trying to dodge the tax man is sure to give the authorities even more reason to shut them down.
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, but in Canada, you don't have to charge GST (same name, who would have guessed) if you make less than $30,000 in revenue.
You also lose the ability to claim ITCs input tax credits. Given that anybody driving regularly for uber is buying gas, paying for maintenance and repairs... it would probably actually boost their net take home slightly to collect the tax.
The revenue is also going to include any money uber keeps for itself. The only way the CRA only looks at the revenue uber pays the driver is if the CRA decides the driver is really an employee... and then the 30k excemption is moot, because it will at that point be conside
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in Canada, you don't have to charge GST if you make less than $30,000 in revenue.
$75,000 in Australia. But passengers are paying Uber, not the driver. Uber is evading tax by operating across the border.
Of course they also pay no company tax, insurance, taxi-registration or comply in any way with industry regulation.
If Uber is forced to collect GST, it will then be in the drivers' interest to register for GST so they can claim GST deductions for expenses.
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Not sure how things work in Australia, but in Canada, you don't have to charge GST (same name, who would have guessed) if you make less than $30,000 in revenue. It's possible they could get around it by making the drivers individual businesses.
Although, I think that Uber rides really should be charging tax. They are already semi-illegal in many places. Trying to dodge the tax man is sure to give the authorities even more reason to shut them down.
Here in Australia you don't have to collect GST if you gross less than $80kpa. You still have to pay it on all goods and services regardless of your income - except those goods and services that are exempt. Transport is not exempt (not considered essential - like tampons).
I guess the question is whether Uber is "collecting" the money - or the driver. (sorry not lunching with the ATO crowd today - so consider that unauthoritative).
Re:Fuck this bullshit. (Score:5, Informative)
The shop down the road can't avoid sales tax.
The online shop based in Australia can't avoid sales tax.
The online shop based outside Australia can avoid sales tax.
This puts Australian businesses at a disadvantage, i.e., the tax regime fucks your own people.
So the choices are:
* level the playing field by abolishing sales taxes (the market fundamentalist/tax haven model)
* level the playing field by requiring individuals to declare and pay the sales tax (the US model)
* level the playing field by requiring foreign companies to collect and pay tax
Most governments go for the latter.
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What I would really want is the ability to say where I want my tax money to go to.
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What I would really want is the ability to say where I want my tax money to go to.
You already have that ability, it's called an election.
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You already have that ability, it's called an election.
Hahahah - you crack me up. They decide after the election how to misspend our tax dollars.
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Seriously, how naive can people get?
You have ZERO say in how your tax dollars are spent
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Your frame of reference is the US, I presume. Just because your system is dysfunctional that doesn't mean that all democracies are. It could be because you have so many voters per representative that your system works substantially worse than in smaller countries where a smaller number of voters can decide the fate of a representative that seems too prone to be swayed by lobbying money. That is my main concern with European integration since whilst I do advocate one federal EU state, I'm concerned about how
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Capitalism is worse than government.
The government has been bought by "capitalists" and has forgotten their constitutional duties and responsibilities
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So cute and naive.
The new are bought as fast the current
America isn't really a representative republic (it was NEVER a democracy) anymore, it's a plutocracy
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It's becoming less and less of a representative republic because we are disempowering the individual (in the name of the greater good) and wondering why there are no checks and balances.
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The bigger joke is whenever a president, or sec. of state, or whatever position of power goes out and preaches about how great America is because "It's a democracy!" when it isn't
Corporations are worse than government, because there's not even the pretense of helping the citizens, it's all about the greed.
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"Latter" compares two things. Perhaps you meant "last"?
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They always need just a little bit more, don't they.
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The online shop based in Australia can't avoid sales tax.
The online shop based outside Australia can avoid sales tax.
Not so simple. It is more if it is posted from overseas there is no tax. Many local companies have overseas subsidiaries that ship from Asia and do not collect GST. More expensive items (currently over $1000) will be taxed on arrival by customs.
Goods sent from overseas have the disadvantage of higher shipping cost and/or much longer delivery times, as well as loss of warranty (or expensive return shipping). So the scope is limited. It will never be like Amazon killing off local businesses in the US.
And when
Australian here with wishful thinking (Score:5, Insightful)
I would support this if the government:
1. Pursued these companies for company tax, not just make them pass on GST from our pockets.
2. More funding to the ACCC to make these companies actually stick to Australian Consumer Laws (i.e. Sony PSN & Steam)
3. Do something about the price disparity to overseas that can not be reasonably be explained by the tax, shipping, costs to do business in Australia, etc.
But knowing this government, it will just be another hairbrain implementation that hurts anyone who is not a middle/upper-class baby-boomer.
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well, vat/sales/whatever tax is a company tax.
it's just easier to see that you're paying it and much harder for the company to dodge as a result.
how uber drivers were not paying it so far sounds like fraud though. it's like claiming that since you're using a credit card to pay (digitally!) that you could skip the sales tax..
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Australia has Company Taxes AND GST(VAT/sales)
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yeah and how is gst/vat not a tax on what the company sells? that's what I meant.
like, if you're paying vat on your bought google adwords.. then that wasn't dodged. any other tax would increase pricing accordingly as well.
Re: Australian here with wishful thinking (Score:2)
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well, vat/sales/whatever tax is a company tax.
No, it is a government tax. It has nothing to do with the company and that is why the company doesn't just bury it in the price. The government is the one who sets the rate, when it should be charged and who ultimately is the benefactor of this tax. However, the government is too lazy to actually put forth the effort to collect it, so they force companies to shoulder this burden. Obviously, this also has the effect of making the company look like the bad guy to the consumer. Charging Sales Tax represents
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Don't know about Australia but in Canada businesses get refunded any GST they pay so it's a consumer tax.
Re:Australian here with wishful thinking (Score:4, Insightful)
I agree in principle with what you said but there's reasons the above aren't being done:
1. Pursued these companies for company tax, not just make them pass on GST from our pockets.
This is not as easy as it sounds. Company tax legislation is a complete clusterfuck and there's no easy laws that can be introduced to fix it without creating a heck of a large legal problem. There have been efforts over the past 10 years from both governments to solve this, and all they've done is baby steps.
2. More funding to the ACCC to make these companies actually stick to Australian Consumer Laws (i.e. Sony PSN & Steam)
The ACCC doesn't actually need more funding. From what I can tell they are doing a wonderful job already making these companies comply with the consumer laws. The problem here is that consumer laws don't provide the protection you think they do. I'm not sure why you mention either the PSN or Steam as neither of those services seem to run afoul of anything in the laws. On the other hand things like the Xbox360 red ring of death the ACCC was quick to slap MS around a bit for not covering what was clearly a manufacturing defect under warranty resulting in Australia being the first country with extended warranties to cover the problem.
3. Do something about the price disparity to overseas that can not be reasonably be explained by the tax, shipping, costs to do business in Australia, etc.
This I can get behind.
Re:Australian here with wishful thinking (Score:4)
Valve and the ACCC are still in a spate of litigation (according to the Q1 ACCC report here http://www.accc.gov.au/system/... [accc.gov.au] ) in regards to not offering refunds.
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There have been efforts over the past 10 years from both governments to solve this, and all they've done is baby steps.
Guess why. Those who have the gold make the rules. No party, particularly the Liberals, is going to cause problems for their major donors. Particularly when it will be contested by high end lawyers and mass advertising every step of the way.
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No party, particularly the Liberals, is going to cause problems for their major donors.
Hardly. This is Australia. Most of our donors and wealth is generated by minerals and resource companies who pull stuff out of the ground and hence can't incorporate overseas.
Re: Australian here with wishful thinking (Score:1)
For proof, see what happened to the mining super tax. Gina was surely not going to let that one through while profits were high.
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The problem here is that consumer laws don't provide the protection you think they do. I'm not sure why you mention either the PSN or Steam as neither of those services seem to run afoul of anything in the laws.
I'm dont know or care about PSN, but the ACCC disagrees with you where steam is concerned [accc.gov.au].
Perhaps you should inform them that the consumer laws don't provide the protection they think it does, since you obviously know better.
For those who can't be bothered researching, Australian consumer protection laws guarantee us a refund in the event of a product that is not fit for purpose. For example, a game that doesn't run. If an item I have purchased is not it for purpose, then I am entitled to my choice of a ref
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You are absolutely right. I was under the impression the parent was talking something about the general state of the service, not specific cases.
But my point is the same. The system is working as intended. There is a problem and the ACCC has taken them to court on behalf of consumers. What will extra funding achieve, unless you can post to evidence of backlogs that allow companies to get away with murder?
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If you've ever made a complaint to the ACCC you'll know that they're awesome but their responses always boil down to "we dont have enough resources to investigate every complaint". The system is working as intended, yes... where the biggest dodgy operators are concerned. But it took the ACCC years to actually prosecute valve, and valve has enough resources to drag on litigation for months and months. It's effectively possible to get away with violating these laws if you're only a small operator. The ACCC do
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Yes and no. The ACCC is only a consumer advocate on broad issues. Individual complaints do not carry much weight, and that is part of the problem here. The correct course of action for a complaint against a company is:
1: Direct to the company.
2: Industry ombudsman.
3: Fair trading commission.
4. Small claims court.
5. ACCC.
And even then the ACCC monitor the above 4.
Before advocating the increase in budget we would need to change / clarify their role. Their role is not to go to court on behalf of you, their rol
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Abbott is actually making John Howard start to look pretty good.
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that is just fucking retarded, sucks to be you :(
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4. Allow purchases to be resold, rather then ultimately evaporate into the digital ether.
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I would support this if the government:
1. Pursued these companies for company tax, not just make them pass on GST from our pockets. 2. More funding to the ACCC to make these companies actually stick to Australian Consumer Laws (i.e. Sony PSN & Steam)
You are effectively saying every online business needs to also incorporate in Australia. Should they incorporate divisions in the 100+ other countries they operate in too? If the Australian government keeps up at that rate they are going, you'll start to find more online businesses just saying, "Fuck it. Australia is too hard / not worth it" and you can pay even more for even less. Meanwhile, I'll enjoy things like my fiber to the home internet in third world Phnom Penh where, unlike Australia, the gove
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I would support this if the government:
1. Pursued these companies for company tax, not just make them pass on GST from our pockets. 2. More funding to the ACCC to make these companies actually stick to Australian Consumer Laws (i.e. Sony PSN & Steam) 3. Do something about the price disparity to overseas that can not be reasonably be explained by the tax, shipping, costs to do business in Australia, etc.
But knowing this government, it will just be another hairbrain implementation that hurts anyone who is not a middle/upper-class baby-boomer.
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> 3. Do something about the price disparity to overseas that can not be reasonably be explained by the tax, shipping, costs to do business in Australia, etc.
I don't think they really can. Companies set their prices higher because of simple supply and demand. Australians still consume these products at the higher prices, even though those prices are way above the minimum wage/cost of living differences between the US and Australia. It would require the Australian government to introduce specific price gou
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I thought Australia was already doin
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Of course, the problem might really be that the laws are such that to remain profitable, you have to change higher prices. I mean, think of a simple law like mandating that consumer products get 2 years of warranty. Pretty innocent, except it really means you're agreeing to the extended warranty - what may cover 90 days in the US with a 25% extended warranty to 2 years means that warranty price is built into the Australian price.
Or you could just not build shoddy crap that breaks within 2 years. Then you spin it in the US by making ads which say "won't require replacing after 18 months!"
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1) What's the difference? Do you anticipate that these companies will go out and mow lawns to make up for what the tax is costing? Any costs of doing business tacked on by the government get passed on to the customers; that's the way it works.
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I don't live in Australia to know what the practice is there, but here in the US it's not uncommon for a company to advertise one price, but then tack on a variety of fees, taxes, and surcharges to the final bill that actually pay for the service and cost associated with providing it.
"Oh your rate plan for your [cable|internet|cell phone|whatever] is 19.99. Your monthly bill is $82.45 after adding in sales tax, USF fee, phone number|IP rental surcharge, regulatory compliance fee, capital improvement fee, l
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Yes, make the corruptions take the tax out of the money they get from the magic money tree behind their headquarters building, not from the money their customers pay!
That's great news! (Score:5, Funny)
That's great news!
Because every Australian I have ever talked to has complained about not paying enough for digital music, digital games, and digital movies.
It's like the Australian government commissioned a bunch focus groups, attached electrodes to people's brains, read their minds, and did the exact opposite of what everybody wanted.
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Abbott has been doing dumb shit like this for 18 months.
Please, Amercia, send the CIA to "bring democracy" back to us.
At least it will be a coup we actually need.
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Abbott is committed to the war on terror/pedophiles/copyright pirates. You assume the CIA dislikes an ultra-conservative yes-man running the country.
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if taxing taxi driving as a service is dumb, then australians must be pretty dumb.
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Putting GST on those products/services is a good idea, but such actions should be delayed pending the investigation of the various suppliers/importers for price-parity in Australia.
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Newsflash: As a knee-jerk reaction, people don't want to pay more taxes.
However they do want public services. Closing down public services is the opposite of what people want too.
Problem is, those are paid for with taxes.
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That's great news!
Because every Australian I have ever talked to has complained about not paying enough for digital music, digital games, and digital movies.
It's like the Australian government commissioned a bunch focus groups, attached electrodes to people's brains, read their minds, and did the exact opposite of what everybody wanted.
If it is yours to keep forever and ever or later resell, then i could see charging sales tax on it. However, if it is like Netflix, and you are really renting the movie, then I can't see charging a sales tax on it (nor can I see that for a brick and mortar rental, but they still charge sales tax on those as well.)
Great news! (Score:4, Informative)
Yes! (in theory)
See, the introduction of the GST was to coincide with the bundling of a bunch of other taxes into one. For some goods, most notably electronics and "luxury items", they actually got cheaper. This was because it's truly a stealth tax on the poor, by taxing commodities like bread and orange juice (which previously would have been taxed at lower rates or even subsidized), and lowering the tax on luxury goods to only 10% (where they would have previously commanded much higher taxes).
So, of course, it's possible that Steam games and Netflix and other such things are about to get a whole lot cheaper. After all, most software is more expensive here; in some cases this is simply because "it's what the market will pay" (read: foreign companies gouging us for our high quality of life), but in some others, it's because of taxes. So in theory, prices could actually drop.
In theory.
It won't actually happen, because our economy is roaring along thanks to the mining boom, and the powers-that-be want to slow it down a bit and rake in some of the dough while the going's good.
Besides. That election promise is so many governments ago nobody gives a fuck anymore, but it's nice to dream. Dream the fevered dream of a madman; that taxes will even once go down, and that Australia might, one day, pay "only" as much +10% of digital products as the US, UK, and other places.
One day...
One day.
Slow it down - what's wrong with that? (Score:2)
What's wrong with that? If you don't, it will end in accelerating inflation and a balance of payments crisis.
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You're right, to an extent, which is why I pointed it out. There IS justification for increasing taxes at a time when the economy is strong, for all the reasons you outlined.
The issue is that the GST (+10% tax on all goods and services, as its name might imply) isn't the fairest way to tax a population. As I mentioned, it's a stealth tax on low income earners, assuming that the other (higher) taxes are removed and the GST put in their place.
Now, I don't think for a moment that'll happen. That promise was ma
Re:Great news! (Score:4, Insightful)
Errr, yeah, OK. Checked mineral commodity prices lately?
It's slowing down quite nicely by itself thank you, and no thanks to any (non-existant) government attempts to slow it down. Besides which the Aus govt is still wedded to the completely dickheaded means of manipulating the economy by controlling housing availbility & prices - anything else is a bit too complicated for the "Clever Country"*...
(* Where "clever" means "I negative geared out my arsehole & now have slightly more money than I started with"...)
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The housing bubble did actually stimulate the economy. Not because of construction, but because we borrowed all of that money from the banking sector, then spent it to keep the economy going.
But what goes up, must come down. It's inevitable that when we collectively try to pay back (or are forced to default on...) our mortgages, our income and money supply will shrink. Austerity policies will hasten the inevitable.
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Bread and orange juice are not subject to GST [ato.gov.au].
Extention description innaccurate (Score:4, Informative)
Not quite. Digital services are already taxed. The tax is being extended to digital services provided from offshore, because Netflix have discovered they can skirt the current tax provisions by having no footprint in Australia and hosting entirely offshore. As the monthly fee falls below the threshold at which personal goods are normally exempt from taxation on import (as it's not worthwhile to collect it) they can charge no tax. However the existing rivals
(eg Quickflix) do have an on-shore presence and so have to charge their customers tax, creating a distinctly unlevel playing field.
I expect New Zealand to follow suit shortly as the same issue is present there.
In two minds about this (Score:2)
I'm on the fence on this issue.
One the one side we have the principle of the GST being a universal tax that is supposed to be equal across the board. Dare I say I actually agree with the government that it's unfair on local businesses that purchasing the goods overseas can be tax free (for goods under $1000, everything else was subject to import duties and GST anyway).
But on the flip side I see this as another incredible amount of bureaucratic red tape that will result in more expensive goods (not from tax
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Dare I say I actually agree with the government that it's unfair on local businesses that purchasing the goods overseas can be tax free (for goods under $1000, everything else was subject to import duties and GST anyway).
you need to put down the crackpipe. People buying stuff overseas is NOT about them wanting to save on the TINY amount that GST introduces.
Seriously folks, GST on $1000 is how much exactly? oh yeah it's $100.
Yet you see things like womens shoes for $700 here and LITERALLY HALF THAT in America, and more often than not THAT INCLUDES FREE INTERNATIONAL SHIPPING.
Australian consumers are BEING RIPPED OFF left, right and centre and retarded businesses CRY FOUL AND GET THE GST APPLIED even though IT CHANGES NO
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Australian consumers are being ripped off but for the wrong reasons. The local shoe store is not making $700 when the manufacturer specifies 2 different RRPs for 2 different countries and the wholesaler won't go below that mark.
You're describing 2 different scenarios which are part of 2 different campaigns our otherwise shitty government is addressing right now.
Hooray for Australia! (Score:1)
Tax away! Just like Europe, woo-hoo! Kick those games-addicted nerds in the teeth and shit down their throats! And then use the tax money to fund the Australian Firewall! Yee-haw!
Whatapackawankers (Score:1)
Well, It looks like our piracy rates are about to jump again then too.
How? (Score:4, Insightful)
And how are they going to collect this GST from overseas companies?
There's no way to ensure that every mom and pop online business selling digital media/games over the Net into Australia will comply with a "request" from the Aussie government (because they have no legal power to force them) to collect GST on their behalf for free.
Will they be asking credit card companies to automatically levy the GST on overseas purchases? If they do then they're opening a pandora's box that they really ought to keep closed.
I could see Bitcoin getting a new lease of life for Aussies :-)
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You seem to be under a misapprehension that the government cares about obtaining a few dollars from "mom and pop" online businesses in any way, shape or form, when the summary mentions the major targets are multi-million-dollar corporations like Steam and Netflix?
As to how, surely given a minute or two you could come up with at least an inkling of possible ways to check compliance? And perhaps it's possible that the people whose job it is to come up with such methods might devote rather more than a minute o
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Given that the Australian government is about to introduce an internet filter (thanks to new anti-piracy laws designed to let big media companies force ISPs to block overseas pirate sites), it wouldn't be that hard for the government to simply block via the filter any web site that refuses to comply with the law and hand over the 10% GST (and the appropriate records of how much Australian customers spent on the site)
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Yeah but enough of the customers of the site being blocked for failing to pay GST wouldn't know how to use things like that to push the site into GST compliance.
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And how are they going to collect this GST from overseas companies?
Most likely, they will simply comply. Having unpaid tax debts in Australia may be an obstacle for future expansion of their business into Australia.
If they don't, Australian tax authorities would also have enough methods to enforce payment:
They could also ask ISPs to block them on the grounds that they are are criminals providing an illegal servi
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I just sold a house. The price difference is less than the mortgage interest and other costs over 10 years. So. I just got kicked in the teeth by CGT, a tax which they promised to kill when the GST came in.
You didn't "just get kicked in the teeth" - a house is not an ATM. You didn't include the value of living in the place for 10 years, plus depreciation. Would you be claiming that it was wrong that you had to sell your 10-year-old car for less than you paid for it + interest and other costs for years.
You bought during an obvious bubble and thought prices would never go down so you would basically have a place to live for free. So sad, too bad, reality bites - and it has really sharp teeth.
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I assume this was an investment property that you sold. You don't pay any CGT if you sell your place of residence, assuming it's always been your residence since you purchased it.
In which case, tough luck. Your paying a tax on the profit you made on an investment property. I assume you didn't complain when you reduced your past tax bills through negative gearing and investment property expenses. If those benefits are removed, then you can complain about the CGT.
Starting ? (Score:2)
Stupid fat sack of shit (Score:5, Interesting)
If he wants to bring in some fucking revenue, END NEGATIVE GEARING.
For foreigners who don't understand, you can buy a second, third, fourth, nineteenth goddamned house and can claim the interest repayments, renovations, real estate management fees, maintenance etc against your taxable income.
They claim this 'encourages low cost rentals' and housing to be built by the rich for the renters.
Statistics show the VAST majority of negative gearing boffins actually buy in well established areas because they are worth more money (of course) and will appreciate in value.
They get interest only loans and bank on the "fact" that housing should double in value every 7 years (incomes sure don't though)
What negative gearing actually does is artificially drive investors (ie: rich people) to offload cash into homes, turning the "aussie dream" of owning a home far more difficult for those who can't afford to compete with the rich, trying to reduce their tax.
Furthermore we are also welcome with wide wide open arms, foreign investment into property here, it's not good for the economy, it's good for a miniscule fraction of the population, it's driving the average price up also.
Long story short, me, you and any other Aussie tax payer reading this are literally paying for rich peoples homes, when you explain this to most foreigners they are baffled as fuck "wait, a tax break for people with SECOND homes and THIRD? what about a tax break for people getting their first" ...
It's fucking nuts, disgusting.
Income tax is better (Score:2)
A tax on a commodity focuses that tax on a subset of income--you spend what you make--thus magnifying the tax. If, for example, 2% of all pre-tax income in Australia was spent on Netflix, then a Netflix tax of 10% would translate to an income tax hike of 0.2% across the board; if it were focused on high-income earners, it would affect only the small part of society at a rate almost identical (e.g. the top 50% have 87.25% of the money, 0.2% becomes 0.229%; the top 25% have 67.38%, income tax hike of 0.2968%)
Too bad (Score:1)
This is what happens in a country that takes their citizens right to bear arms away. Higher taxes to better support government bloat is first, next it will be further intrusion into personal lives and jailing people without due process. At some point Australians will be slaves to their government and they won't even know it.....
I know what you are thinking; that's all happening in the US too. At least here in the US we will be able to gather our guns and shut it down when we get tired of it.
Already in New Zealand (Score:2)
Being NZ this seems to comprise:
- US component of US$60
- NZ dollar conversion: NZ$75
- NZ GST on $75 = $86
- Approx 10% sledge up just..because = $94
My forumla seems to approximately apply. I subscribe to a proxy for US Netflix. I cant seem to work around the Steam thing. It would appear some sites like Netflix turn a blind eye to proxies.
I haven't bought GTA V. I don't want it *that*
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According to Google, NZ$92 is 67.5USD.
We in Aus pay 75USD, so are paying comparatively and absolutely more.