Yesterday, the Australian Federal Government confirmed that the ‘Netflix Tax’ will indeed go into effect, adding an extra 10% to digital goods purchased from Steam, Amazon, Google and, of course, Netflix.
Treasurer Joe Hockey also confirmed that the tax will apply to all online digital products and services, including movies, books and games. Physical online purchases under $1,000 AUD won’t have GST applied and won’t change as a result of this new tax.
“What we’re doing is going to digital providers overseas and saying ‘can you apply the GST to the products you provide into Australia?’,” Hockey said to IT News.
“They are agreeable to it. It’s not their profits [being taxed]. It’s a tax collected and they remit it back to the country where that occurs.”
Hockey also said that he believes the new tax will raise over $350 million over the next four years, and will provide further details of implementation with the Federal Budget today at 7.30 pm AEST.
Netflix has already stated it will add the new GST to the subscription price of their streaming service as soon as it is added, sometime after 1 July. GST is already charged to Apple iTunes purchases, so prices there shouldn’t change.
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