The Australian Government is introducing new rules that impact authors and customers based in Australia. Commonly known as the “Netflix tax”, the Government is now requiring that suppliers to Australian consumers collect and remit GST on all digital purchases and services.
This impacts any Australian author supplying to Australian buyers. If you are an Australian author currently registered for Australian GST, please note that Envato, as the Electronic Distribution Platform, will collect and remit the GST on your sales to Australian consumers from 1 July 2017.
In addition, as Envato provides Australian authors with services and charges you author fees, Envato is required to charge GST of 10% on your author fees. As a result, we will be charging GST of 10% on all Australian authors fees from July 1, 2017.
We encourage all Australian authors to do their own research and check with their accountants on how this impacts their business. Please also check to make sure that an ABN is in your profile. For reference, we’ve also written a help doc and we encourage all Australian authors to read it.
Customer facing changes
There are two small changes facing our Australian customers. To learn about them in detail you can click across to our help centre article here.
The first change deals with the new “Netflix tax”. Given that Envato is an Australian entity and classified as an Electronic Distribution Platform; from the 1st of July onwards we will be required to charge an additional GST fee of 10% GST on top of the cost of items and item support.
Why have we done this?
Quite simply, we need to comply with Australian tax law! New laws mean new rules, and we’ve got to ensure we comply with what the Australian Government asks of us so that we can keep our Envato platform alive and healthy.
The second change deals with how we process GST for our Australian Authors and Customers. In the past, Envato has absorbed the cost of the GST for both these parties. However from the 1st of July, we’ll be moving to a standard model of charging 10% GST on both author and buyer fees.
Why have we done this?
We had been absorbing this cost up until this point, so why stop now?
When we absorbed the cost of the GST for customers in the past, it wasn’t a case of wanting to show favouritism to our fellow Aussies (as nice as that may sound). Instead, we absorbed the cost because we simply didn’t have the resources available to build infrastructure that would manage the GST tax process for us. With the growth in our company, we’ve adapted our approach. Charging GST to our Australian customers keeps us in line with the rest of Australian digital platforms and means that selling to AU customers continues to make business sense.
Any questions, please feel free to ask them below.