Amazon purchases and new GST Rules

Has anyone else received this email as copied below from Amazon with the changes to the Australian GST laws??
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As a result of changes to Australian GST law, on 1 July 2018 Amazon’s international shopping options for Australian customers will change.

While we regret any inconvenience this may cause, from 1 July we will be redirecting Australian customers from our international Amazon sites to amazon.com.au where you can shop for products sold by Amazon US on the new Amazon Global Store, available today. We have taken this step to provide our customers with continued access to international selection and allow us to remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.

Amazon Global Store will allow Australian customers to shop on amazon.com.au for over four million items that were previously only accessible on amazon.com. This selection is in addition to the more than 60 million products that are already available on amazon.com.au across 23 categories, including books, fashion, toys, and electronics.

To welcome you to amazon.com.au, and thank you for choosing to shop with us, we are offering you a $20 voucher to redeem against your next purchase on amazon.com.au of items sold and shipped by Amazon AU. Just include your unique promotional code below at checkout when purchasing eligible items (see full terms and conditions below).

Thank you for choosing to shop with Amazon.

https://www.news.com.au/finance/busi...cee7046f63b894


...In an email to customers, Amazon said “while we regret any inconvenience this may cause”, it would redirect Australian customers from its international sites to Amazon.com.au, “where you can shop for products sold by Amazon US on the new Amazon Global Store, available today”.

No doubt at Australian prices.....

most common Google search term for the next 6 weeks -- How do I get around Amazon's geoblocking?

It’s in the online papers now, Peter.


Missed woodPixel’s thread link.

I’m sure this will result in fairer prices for Australians. Not like retailers were gouging us before online shopping became popular right?

Lord I’m sick of this government.

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Originally Posted by bueller

I’m sure this will result in fairer prices for Australians. Not like retailers were gouging us before online shopping became popular right?

Lord I’m sick of this government.

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you really shouldn't blame the government

this latest is really the Gerry Harvey Tax

It will be interesting to see how that works. As for geoblocking vpn will take care of the purchases. I use opera browser and it has built in vpn. All I have to do is open settings, click the privacy and security tab, click the vpn checkbox and all my browsing is routed internationally. Click it again and it's off again. I don't need to reboot the browser or anything. It's trivial...

They may however refuse to ship to aus off the USA site in which case a reshipper will be needed.

It's bs of course. The price difference was never 10%, more like 50%.

The other thing I've notice is that last year purchases from china were coming in maybe 2 weeks. It's now 6 - 8 weeks and I suspect it customs holding stuff up. I have no absolute proof of that. You gotta wonder....

I have just compared prices on something I purchased a while ago: audio tecnica ath-anc23 ear buds (for my wife). The Amazon (US) price was $37 (USD), which was what I paid. The Amazon (Oz) price is $123.56 (AUD). That's a hell of an exchange rate!

Regards from Perth

Derek

I heard about this today, figure now is the time to spend up and buy a bunch of things that I have had sitting in my cart "until I had the cash"

It's funny how big business can happily run small business out of town but as soon as they have foreign competition they scream bloody murder.

Indeed. The Amazon prices are not equitable. Perhaps they are still working on that...:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:

(unless a 300% markup is their actual goal).

On the China delivery speed, I've found it faster than ever.

... But today I did get a kilo blonde dewaxed shellac flakes from India, the bag has been slashed open by some ham fisted barbarian in customs. Made a right bloody mess of it!!!!

One last thought, I like the way the government is leveling the playing field by increasing taxes... After all, paying more tax is somehow "fair".

What an obscenity.

What about all the products that we had access to on amazon.com that aren't sold and shipped by Amazon. :? Note that Derek's ear buds aren't sold and shipped by Amazon on either site.

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Originally Posted by woodPixel

One last thought, I like the way the government is leveling the playing field by increasing taxes... After all, paying more tax is somehow "fair".

What an obscenity.

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unfortunately, put that way it just sounds like a selfish whinge.

what I believe you mean is that no reasonable person objects to paying GST on their overseas purchases. What they do object to is local wholesalers and retailers using the GST as a shield to justify markups in the order of 300% compared to the world price. That and the lack of choice. Previously the government has acted to allow parallel imports to protect Australian consumers from restricted choice and price gouging by local wholesalers and retailers. With the decision to apply GST on low value imports, the government has effectively returned price gouging to the Australian market.

I wasn't whinging - though I do like to complain :)

My para-quote came from several articles, such as "“This new law levels the playing field for Australian businesses, by forcing foreign businesses to pay GST,” Mr Morrison said in a statement. “The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia. That tax revenue is used to fund essential services."

Perhaps I've mentioned it before, but this whole GST thing is a fiasco. To describe any tax system as fair is wrong. To claim that adding taxes to a consumers purchases from now on creates "new fairness" is wrong.

More insane, is the way they expect a foreign business to collect and remit GST to the ATO. I'd really love to see how they are going to police THAT... (unless, as I think, very dark days are coming wrt imports)

The Amazon move is very clever. Too clever by half. Thinking it through took less than 10 minutes to realise its a way of loading up the local operation with an absolute mountain of overseas debt (no taxes paid!!!), obtain a fast-tracked bulk container shipping mechanism, a government-sanctioned hammer-blow to the head of small retail businesses PLUS a means of restricting supply to increase local margains. Brilliant. In one swoop they have turned themselves into the enforced Australian distributor for 5 million extra products. Small/medium business will have no choice but to deal with them (watch Amazon strangle the supply lines!). Pure genius!!! It's the evils of Walmart in the 90's times a million.

Obviously there is some work for Amazon AU to do yet. I just thought to see what the differences are. These are in my basket for buying...

Freeman PFWS Professional Fine Wire Stapler us25.81 au161.54 (welllll.....)
3M Peltor Optime 105 earmuffs us19.88 au106.00 (guess its off to Blackwood)
Mirka 9A-241-120 6-Inch 120grit us45.00 au61.14 (not bad!)

The rest are staples for the stapler (none in stock in AU), a video capture device to save my old tape movies of the kids and a variety of milk paints.... none of which are on the site here.

Let's hope the AU site takes the order, bungs it all in a shipping contain in bulk, ships it over and local delivers en-masse. It would be a PITA to get all these things separately.

I hope local retailers somehow get on top of this.

Whilst I accept we pay a premium for product, I don’t think you can compare prices from differently geared economies on a like for like basis without also looking at wages and all the other costs of business which are huge.
Australia is ridiculously expensive to do business in.

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Originally Posted by woodPixel

Mr Morrison said in a statement. “The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia. services."

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Mr Morrison, surprise, surprise, is being somewhat disingenuous with his statement. Multinationals and for that matter Australian companies, do not pay GST they collect GST. My political cynicism tells me that by using the words multinational, pay and tax in the one sentence he thinks that he can bluff the populace into thinking the government is doing something about the income tax that they are not paying.
As someone else noted, I don't think that Australians really begrudge paying 10% GST. I do think however that we have an issue with some of the extortionate mark-ups applied locally.

I know of a group on another forum who are about to make Morrison's life a little difficult for a while. They are going to buy very cheap womens erotic underwear and address it to his PO box to see what happens. This group generally carry through what they say and have been known to cause businesses that rip people off some considerable problems so it will be interesting to see what happens.

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner? Maybe they don’t want to make easy money and rather just shut up shop.

Just doesn’t make sense does it.

What I'd like to know is if Amazon.com.au's geoblocking is legal.
It's not like it only applies to copyrighted material where there might be some argument about Australians should purchase the item through the Australian rights holder.
Which becomes very tenuous where there is no Australian rights holder.


On the face of, forcing Australian consumers onto a local site with restricted range and/or grossly inflated prices, is a restraint of trade. Perhaps bordering on unconscionable conduct.

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Originally Posted by Beardy

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner? Maybe they don’t want to make easy money and rather just shut up shop.

Just doesn’t make sense does it.

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one issue is that the little one man band corner shop does not have the buying power of a chain store retailer.
It's not uncommon for the retail price of a chain store special to be less than what the corner store can buy the identical item for.

The real pain of Amazon's move will be felt in the area of specialty merchandise.
According to the Productivity Commission around 30% of low value imports are bicycle parts. One would have to think that a large proportion of these imports are going to one man band bike stores.

And given this is a woodworking forum, how likely is it that Carbatech or another retailer will stock the full range of Pfeil carving tools or Auriou rasps?

Just found this on MSN.COM



Amazon will soon be sub-prime, if you live in Australia. The company is blocking Aussies from shopping on its international websites, and limiting them instead to its much smaller local platform, Amazon.com.au.

The change, which takes effect July 1, is Amazon’s response to a 10% goods and services tax that Australia is adding to all imported online goods worth less than A$1,000 ($756). Previously, GST only applied to most goods and services sold in Australia, as well as imports worth more than A$1,000, giving companies that sold cheap imported goods an advantage over local suppliers.
“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 spokesman told Reuters. Goods sold on Amazon.com, the US site, will cease shipping to Australia on July 1.
Amazon is still fairly new in Australia, where it only launched in December 2017. Amazon.com.au has roughly a tenth the selection of Amazon’s US website, with about 60 million products compared to nearly half a billion. When Amazon first launched in Australia, local media also reported that prices on the site weren’t all that great, and could be beat at regular department stores.
For now, the GST change looks like a win for local businesses, which will have an easier time retaining shoppers while Amazon builds out its Australian inventory. But taxes seem unlikely to protect brick-and-mortar shops from Amazon—.com or .com.au—in the long run.

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Originally Posted by ian

What I'd like to know is if Amazon.com.au's geoblocking is legal.
It's not like it only applies to copyrighted material where there might be some argument about Australians should purchase the item through the Australian rights holder.
Which becomes very tenuous where there is no Australian rights holder.


On the face of, forcing Australian consumers onto a local site with restricted range and/or grossly inflated prices, is a restraint of trade. Perhaps bordering on unconscionable conduct.

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is that a national or international law? My guess is that given it is not an Aussie owned site they can do what they like and Australian law has no effect on them.

I have no idea. Just curious.

Quote:

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Originally Posted by Beardy

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner?.

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Simple answer - Markup doesn't equal profit.

If I buy 100 widgets for $100, and then sell them to you for $200, I've made $100 profit right?

NO!

I made a $100 contribution to my fixed costs, like rent, office equipment, wages, electricity, etc. Only once I've paid for all those underlying fixed costs do I start to make a profit.

I've always avoided buying from harvey norman, this just gives me another reason not to go there.

As for amazon ebay are cheaper about 80% of the time for me.

Thank you for the comment on fast chinese shipping. Maybe it's just me that's had a poor run lately...

While I was looking into sharpening my chainsaw last week I priced new chains. $11.50. It's almost not worth sharpening the thing...

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Originally Posted by q9

Simple answer - Markup doesn't equal profit.

If I buy 100 widgets for $100, and then sell them to you for $200, I've made $100 profit right?

NO!

I made a $100 contribution to my fixed costs, like rent, office equipment, wages, electricity, etc. Only once I've paid for all those underlying fixed costs do I start to make a profit.

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Yes I understand that, my post was full of sarcasm in reply to those that think we are getting ripped off when comparing prices from two different economies

Just to interject briefly. I think some are a little confused with regard to GST. The vendor merely collects and remits. The consumer/ user is the one who pays.

The legalities and protocols of collection of Australian Taxes by overseas entities seems to have been resolved between those entities. Whether or not it actually happens is someone elses issue, whilst I have a report that indicates GST has been withheld from my sales then I'm a happy camper.

Who gives a toss really? I'm happy to pay my share, my customer pays, I don't. I merely collect and remit if need be.

Cheers
Chill

Does anyone honestly think that a French company or one in Sudan is going to remit their collected GST?

I suspect every overseas company will gleefully collect the extra 10%, but it will be extra effort-free profit that will go straight into their pockets.

We are schmucks.

I have no problem paying GST on imports, problem is retailers will just put it in the too hard pile and refuse to ship here. Considering Amazon refused to play ball I can’t imagine too many smaller businesses will be willing to put in the effort. Pretty annoying, a lot of the stuff I buy from overseas isn’t even available locally. Guess I’ll have to start dealing with more drop shippers [emoji19]

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Originally Posted by bueller

I have no problem paying GST on imports,

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agree.

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problem is retailers will just put it in the too hard pile and refuse to ship here. Considering Amazon refused to play ball I can’t imagine too many smaller businesses will be willing to put in the effort.

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that for me is the issue. Restriction of choice.

The limit for compliance is supposed to be sales over $75000 per year INTO Australia. Hopefully many smaller OS retailers will be below that limit.

I think that Amazon is taking a "principled" stance. Chop Australian customers off at the knees in the hope that we will pressure the Government to do a rethink. (Watch to see if it's an issue at the next Federal election). If what I think is Amazon's strategy is successful, then this policy will be short lived.
Amazon after all doesn't want to be the world's tax collector

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Pretty annoying, a lot of the stuff I buy from overseas isn’t even available locally. Guess I’ll have to start dealing with more drop shippers [emoji19]

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just remember to write to your local MP every time you can't purchase what you need.

I'm pretty sure Amazon is capable of calculating different taxes correctly for various states in the US so I don't think calculating GST for Australian shipping addresses is really going to be that challenging for them. I suspect they just want to force every Australian onto the local portal.

I'm more concerned about the per package fee proposed by the Home Affairs Department on parcels. This will mean my $1.20 widget including postage (plus GST of .12, {will they also charge GST on the shipping cost portion?}) from China will now attract an additional $5 Home Affairs handling fee. How is it going to be collected? Why doesn't the Government just add the 10% GST charge at the same point? Given we have tax treaties with a lot of countries, will any overseas VAT paid be credited against GST to be paid locally? If not isn't that double taxing?

The alternative would be to go back to the old days, when we used to have to pay import duty before collecting imports from the customs depot in Elizabeth St. in Sydney.

Not really sure what is going to happen, but the new tax frameworks are for less than $1000 value items, it has already been applied to items over $1000 for the past year. Anyone got any experience of how it effected those items in the past 12 months, i.e. did they go up by 10%/20%/300% ?

Quote:

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Originally Posted by q9

Simple answer - Markup doesn't equal profit.

If I buy 100 widgets for $100, and then sell them to you for $200, I've made $100 profit right?

NO!

I made a $100 contribution to my fixed costs, like rent, office equipment, wages, electricity, etc. Only once I've paid for all those underlying fixed costs do I start to make a profit.

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I think everyone understands these basics.

But, when a company like Harvey Norman that operates in the hundreds of millions of dollars of net income (ie after wages, tax, electricity etc) and is run by a billionaire is complaining about unfair competition........

It should be noted that these stores will also happily undercut smaller local competition, by just enough to win the sale. No one in business sells for a common and fair margin, you sell at the highest price you can, if the small local store is buying a tv for $1000 and selling at $1500 and you are buying the same thing for $400 you don't sell at $900, you sell at $1450.

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc

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Originally Posted by cava

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc

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My understanding is no, all purchases will attract tax, but I have no idea how it is going to be enforced. Maybe China will just make everything free but charge for postage

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Originally Posted by cava

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc

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from memory it's supposed to be
>$1000 (goods + Shipping), 10% GST as per current arrangements -- i.e. collected at the border
$300 to $1000 (goods + shipping), 10% GST collected at point of sale, or point of on forwarding if you use a freight forwarder like Shipitto.
<$300, GST free.

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Originally Posted by Fuzzie

I'm pretty sure Amazon is capable of calculating different taxes correctly for various states in the US so I don't think calculating GST for Australian shipping addresses is really going to be that challenging for them.

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As I understand the US sales tax regime, tax is only payable where the retailer and customer reside in the same state. And collecting and paying the tax is the retailer's problem.

Again as I understand the new "rules", Australia is making Amazon responsible for collecting the tax for all goods bound for Australia where the sale is transacted or the retailer accessed through Amazon.com, amazon.co.uk, etc

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Originally Posted by ian

from memory it's supposed to be
>$1000 (goods + Shipping), 10% GST as per current arrangements -- i.e. collected at the border
$300 to $1000 (goods + shipping), 10% GST collected at point of sale, or point of on forwarding if you use a freight forwarder like Shipitto.
<$300, GST free.

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I've just looked through as much of the ATO and Home Affairs websites as I can stand for one session, and I've seen no mention of $300 whatsoever. No mention of $50 either.

However, what does stand out time and time again is that if the goods are >$1000 then the GST (and any applicable Import Duty) will be charged at the border, just the same as it currently is. That is to say that the retailer/freight forwarder etc DOES NOT charge the GST and forward to the Govt, but the receiver will be sent a First Notice by Aust Post, pay the GST and Duty, and then the goods will be released by AP for delivery.

What is not clear, or even mentioned by those sites, is what happens when purchasing from a retailer who DOES NOT sell more than $75,000 pa to Australia and who is sending a package that is less than $1000. Apart from eBay, Amazon, Lee Valley and perhaps a few dozen others, this will include a helluva a lot of retailers who are sending stuff here.

I can see giant cock ups coming out of this. For example, I have dealt extensively with Shipito over the years. Trying to get them to understand anything more complex than 2 + 2 = 4 is virtually impossible. I can just see them saying that GST has to be paid to them for ALL parcels, inc those >$1000. That will mean that Home Affairs will also demand GST upon arrival, the customer will have to claim the first GST back from Shipito, who in turn will deduct it from their next GST return to the Aust Govt.

Yeah right. That should go very smoothly indeed. Shipito are masters of hiding behind private agreements. For example they say Knives can't be carried by TNT, but TNT Australia says that's OK. Shipito then says "our agreement with the agent here says no". Same deal with wooden items or parts coming via Aust.Post.

Furthermore, I believe that the legislation has been designed to make retailers overseas completely uninterested in sending stuff to Australia unless it is >$1000. What retailer wants to faff around collecting tax for the Aust Govt? For the amount of sales they might make in a year I think they'll just forego that share of the market that they MIGHT have.

THAT is really what Harvey wants. Overseas retailers collecting and paying GST is of no benefit to him whatsoever - no increased sales for him there. He thinks that if it is too hard for the overseas retailers then we will be forced to purchase from him.

John Elliot response to that!

I will go to even greater lengths to not purchase from him.