Amazon to block Australian shoppers from its US website

Inukami · 05-31-2018, 05:37 AM

Amazon to block Australian shoppers from its US website

By senior business correspondent Peter Ryan

Key points:

It is understood Amazon baulked at the administrative burden of tracking GST
Under new collection laws, online retailers will be forced to apply GST to goods bought on international sites and sent to Australia
Amazon will launch a global store accessible to Australian customers
From July 1 when the new GST regulations begin, Australian consumers shopping on Amazon international sites will be redirected to the local Australian site.

Online retail giant Amazon will block Australian consumers from its global sites to counter new laws to force it to collect the good and services tax on transactions.

In a statement issued to the ABC, Amazon said it regretted the move and the inconvenience to customers accustomed to visiting Amazon's global online stores.

"We have had to assess the workability of the legislation as a global business with multiple international sites," a spokeswoman said.

Under the new GST collection laws beginning on July 1, online retailers like Amazon will be forced to apply the 10 per cent GST to goods purchased on international sites and shipped to Australia.

The GST collection requirement came after years of intense lobbying from local retailers in Australia such as Harvey Norman, Myer, JB Hi-Fi and David Jones, who have seen their traditional bricks and mortar sales suffer from online competitors.

Currently GST is applied to items bought overseas for more than $1,000.

It is understood that Amazon baulked at the massive administrative burden of tracking Australian GST from all overseas transactions.

Amazon is launching a global store accessible to Australian customers, where products from its retail site will be available.

In an email to customers today, the company said from July 1 it would redirect Australian shoppers from its international sites to amazon.com.au where products sold by Amazon US will be available on the new global store.

"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," the company said.

"Amazon Global Store will allow Australian customers to shop on amazon.com.au for over 4 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."

'A level playing field will help Australian businesses grow'
'Sick of always having to pay more'

We asked our audience on Messenger to tell us how they felt about Amazon's decision to block Australians from using its global sites. Here's what they told us.

A spokesperson for Treasurer Scott Morrison said the new GST regulations "level the playing field" for Australian businesses.

"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," the spokesperson said.

"A number of other countries are taking a similar approach and adopting a vendor collection model to collect GST from low-value imported goods.

"A level playing field will help Australian businesses grow and create more jobs and opportunities."

http://www.abc.net.au/news/2018-05-3...tralia/9820224

It looks like a lot more people will be using VPN's and baggage forwarding in Australia. I'm assuming this doesn't apply to the Amazon Japan store, only US and UK?

Inukami

Pulpmeister · 05-31-2018, 10:14 PM

I'm not surprised by either development. The small value GST exemption was for the convenience of the Government administration as well as the importer, and was practical and sensible so long as small value private imports were only a very small percentage of private imports. Now that they're a flood, they are a serious threat to government revenue and that loophole has to be blocked. Local on-line retailers pay the GST; evens things up.

Ultimately overseas on-line retailers will have to introduce globally compatible GST/VAT systems into their sales software, specially if they want to sell into those markets without setting up a local store. I wouldn't be surprised if Amazon is doing just that, with an eye on similar problems with other countries in the future.

davidfor · 05-31-2018, 10:54 PM

Actually, Amazon should already be able to do this. The sales tax laws in the US vary between states. And the rules depend on a combination of where the buyer is and where the seller is, or where they have a presence. Extending this to international and GST/VAT should be "easy".

tubemonkey · 05-31-2018, 11:33 PM

Quote:

Originally Posted by davidfor

The sales tax laws in the US vary between states.

...and between cities within the same state.

haertig · 06-01-2018, 12:05 AM

Quote:

Originally Posted by tubemonkey

...and between cities within the same state.

I believe Amazon must only charge the state taxes, not the city (or county) taxes. Here in Colorado, Amazon includes tax on my orders, but it is not as high as the tax I would pay buying in a local store. Also, here in Colorado, they usually charge you a tax amount based on where you buy the item. But if you have it delivered, they charge you tax based on the delivery address, not the purchase address. But there must be some additional anomalies regarding this, because I've only seen taxes charged based on delivery address for large items - like home appliances that come on a store delivery truck. If you buy something locally in a store (but they don't have it in stock) and they ship it directly to your home instead, the tax amount appears to be for the purchase location not the delivery location. Being a government thing, it makes little sense and nobody can figure it out - who knows, maybe the tax amount is supposed to be contingent on the color of the shoes you're wearing. That sounds about par for the course where government is involved.

tubemonkey · 06-01-2018, 12:53 AM

Quote:

Originally Posted by haertig

I believe Amazon must only charge the state taxes, not the city (or county) taxes.

I live in Amazon's backyard and we get dinged for city/county taxes as well.

meeera · 06-01-2018, 05:56 AM

Yeah, I'm calling bullsh*t on the "administrative burden" excuse - if they can handle 50 states, why not one entire country with one single tax regulation? I suspect this is a gambit to see whether Aussie shoppers will put pressure back on the government to rethink.

Last time I looked at amazon.com.au (not long ago), their retail offerings were extremely limited compared to amazon.com. But far worse (for me) will be if they decide to spread this policy to The Book Depository.

Pulpmeister · 06-01-2018, 06:40 AM

There was a talking head on this evening's TV news (in Australia) who pointed out that Amazon's Australian operation has been a lot less successful than planned; that this response by Amazon might be a ploy to boost the Oz operation. Not being in the retail industry, I can't say if the argument has merit.

I've ever quite understood the Amazon phenomenon. It seems little more than Sears and Roebuck gone hi-tech, really, with an on-line mail order catalogue. The stuff still comes in the mail.

JoHunt · 06-01-2018, 07:47 AM

But why place the burden on the retailer to collect tax for another country? In the majority of cases when buying from a "foreign" country, the consumer pays any required tax upon receipt of the parcel.

Amazon is only the beginning. I expect many other companies (Book Depository included since it is owned by Amazon) will follow suit.

pwalker8 · 06-01-2018, 08:55 AM

Quote:

Originally Posted by JoHunt

But why place the burden on the retailer to collect tax for another country? In the majority of cases when buying from a "foreign" country, the consumer pays any required tax upon receipt of the parcel.

Amazon is only the beginning. I expect many other companies (Book Depository included since it is owned by Amazon) will follow suit.

This is part of a larger issue, i.e. some government trying to enforce their rules on an entity that has no physical presence in their boundaries. This is why a lot of websites went dark in the EU over the new privacy laws. Compliance costs matter in today's world.

meeera · 06-01-2018, 09:14 AM

Quote:

Originally Posted by pwalker8

This is part of a larger issue, i.e. some government trying to enforce their rules on an entity that has no physical presence in their boundaries. This is why a lot of websites went dark in the EU over the new privacy laws. Compliance costs matter in today's world.

We'll see what happens next, I guess. Amazon does have a physical presence in Australia, and Netflix has a specifically Australian offering marketed only to Australians.

Greg Anos · 06-01-2018, 09:46 AM

EU's "link tax" proposal?

GlenBarrington · 06-01-2018, 10:26 AM

As an American, I'm not sure I fully understand this issue. Amazon charges tax in any US State in which they have a physical presence, and the taxes charged when I purchase from my home in Illinois is different from the taxes charged when I purchase when in Texas. I have no idea what physical presence Amazon has in either state!

JoHunt · 06-01-2018, 10:53 AM

Quote:

Originally Posted by GlenBarrington

As an American, I'm not sure I fully understand this issue. Amazon charges tax in any US State in which they have a physical presence, and the taxes charged when I purchase from my home in Illinois is different from the taxes charged when I purchase when in Texas. I have no idea what physical presence Amazon has in either state!

The issue is that Amazon.com is a US company. The Australian government passed legislation according to which any company located outside of Australia which sells more than $75,000 per year to Australian residents is required to collect the same 10% goods and services tax (GST) that a company located in Australia is required to collect.

Amazon is refusing to do so and from July 1 will no longer allow sales on its US site to be shipped to Australia. Australian consumers will have to use Amazon's Australian site.

The burden of collecting and remitting taxes for another country is one that many companies will choose not to undertake.

shalym · 06-01-2018, 10:56 AM

Quote:

Originally Posted by GlenBarrington

As an American, I'm not sure I fully understand this issue. Amazon charges tax in any US State in which they have a physical presence, and the taxes charged when I purchase from my home in Illinois is different from the taxes charged when I purchase when in Texas. I have no idea what physical presence Amazon has in either state!

Is Australia one of the countries where the tax has to be included in the price shown on the product page? Or is it like the US, where the amount of tax is calculated in the cart, after the ship to location is chosen?

Shari

05-31-2018, 05:37 AM	#1
Inukami Zealot Posts: 145 Karma: 12 Join Date: Jun 2017 Location: Australia Device: Mac Pro 2013 & Mini 2018, iPad Mini 4, iPhone 11, iBooks, K4Mac/PC	Amazon to block Australian shoppers from its US website Amazon to block Australian shoppers from its US website By senior business correspondent Peter Ryan Key points: It is understood Amazon baulked at the administrative burden of tracking GST Under new collection laws, online retailers will be forced to apply GST to goods bought on international sites and sent to Australia Amazon will launch a global store accessible to Australian customers From July 1 when the new GST regulations begin, Australian consumers shopping on Amazon international sites will be redirected to the local Australian site. Online retail giant Amazon will block Australian consumers from its global sites to counter new laws to force it to collect the good and services tax on transactions. In a statement issued to the ABC, Amazon said it regretted the move and the inconvenience to customers accustomed to visiting Amazon's global online stores. "We have had to assess the workability of the legislation as a global business with multiple international sites," a spokeswoman said. Under the new GST collection laws beginning on July 1, online retailers like Amazon will be forced to apply the 10 per cent GST to goods purchased on international sites and shipped to Australia. The GST collection requirement came after years of intense lobbying from local retailers in Australia such as Harvey Norman, Myer, JB Hi-Fi and David Jones, who have seen their traditional bricks and mortar sales suffer from online competitors. Currently GST is applied to items bought overseas for more than $1,000. It is understood that Amazon baulked at the massive administrative burden of tracking Australian GST from all overseas transactions. Amazon is launching a global store accessible to Australian customers, where products from its retail site will be available. In an email to customers today, the company said from July 1 it would redirect Australian shoppers from its international sites to amazon.com.au where products sold by Amazon US will be available on the new global store. "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," the company said. "Amazon Global Store will allow Australian customers to shop on amazon.com.au for over 4 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." 'A level playing field will help Australian businesses grow' 'Sick of always having to pay more' We asked our audience on Messenger to tell us how they felt about Amazon's decision to block Australians from using its global sites. Here's what they told us. A spokesperson for Treasurer Scott Morrison said the new GST regulations "level the playing field" for Australian businesses. "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," the spokesperson said. "A number of other countries are taking a similar approach and adopting a vendor collection model to collect GST from low-value imported goods. "A level playing field will help Australian businesses grow and create more jobs and opportunities." http://www.abc.net.au/news/2018-05-3...tralia/9820224 It looks like a lot more people will be using VPN's and baggage forwarding in Australia. I'm assuming this doesn't apply to the Amazon Japan store, only US and UK? Inukami

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05-31-2018, 10:14 PM	#2
Pulpmeister Wizard Posts: 2,630 Karma: 29138616 Join Date: Nov 2011 Location: Perth Western Australia Device: kindle	I'm not surprised by either development. The small value GST exemption was for the convenience of the Government administration as well as the importer, and was practical and sensible so long as small value private imports were only a very small percentage of private imports. Now that they're a flood, they are a serious threat to government revenue and that loophole has to be blocked. Local on-line retailers pay the GST; evens things up. Ultimately overseas on-line retailers will have to introduce globally compatible GST/VAT systems into their sales software, specially if they want to sell into those markets without setting up a local store. I wouldn't be surprised if Amazon is doing just that, with an eye on similar problems with other countries in the future.

05-31-2018, 10:54 PM	#3
davidfor Grand Sorcerer Posts: 24,905 Karma: 47303822 Join Date: Jul 2011 Location: Sydney, Australia Device: Kobo:Touch,Glo, AuraH2O, GloHD,AuraONE, ClaraHD, Libra H2O; tolinoepos	Actually, Amazon should already be able to do this. The sales tax laws in the US vary between states. And the rules depend on a combination of where the buyer is and where the seller is, or where they have a presence. Extending this to international and GST/VAT should be "easy".

06-01-2018, 05:56 AM	#7
meeera Grand Sorcerer Posts: 5,716 Karma: 66666666 Join Date: Dec 2011 Location: Australia Device: Kobo Libra 2, iPadMini4, iPad4, MBP; support other Kobo/Kindles	Yeah, I'm calling bullsh*t on the "administrative burden" excuse - if they can handle 50 states, why not one entire country with one single tax regulation? I suspect this is a gambit to see whether Aussie shoppers will put pressure back on the government to rethink. Last time I looked at amazon.com.au (not long ago), their retail offerings were extremely limited compared to amazon.com. But far worse (for me) will be if they decide to spread this policy to The Book Depository.

06-01-2018, 06:40 AM	#8
Pulpmeister Wizard Posts: 2,630 Karma: 29138616 Join Date: Nov 2011 Location: Perth Western Australia Device: kindle	There was a talking head on this evening's TV news (in Australia) who pointed out that Amazon's Australian operation has been a lot less successful than planned; that this response by Amazon might be a ploy to boost the Oz operation. Not being in the retail industry, I can't say if the argument has merit. I've ever quite understood the Amazon phenomenon. It seems little more than Sears and Roebuck gone hi-tech, really, with an on-line mail order catalogue. The stuff still comes in the mail.

06-01-2018, 07:47 AM	#9
JoHunt I am what I am Posts: 6,625 Karma: 62235665 Join Date: Sep 2011 Device: iPad3, Voyage	But why place the burden on the retailer to collect tax for another country? In the majority of cases when buying from a "foreign" country, the consumer pays any required tax upon receipt of the parcel. Amazon is only the beginning. I expect many other companies (Book Depository included since it is owned by Amazon) will follow suit.

06-01-2018, 09:46 AM	#12
Greg Anos Grand Sorcerer Posts: 11,390 Karma: 35440406 Join Date: Jan 2008 Device: Pocketbook	EU's "link tax" proposal?

06-01-2018, 10:26 AM	#13
GlenBarrington Cheese Whiz Posts: 1,986 Karma: 11677147 Join Date: Jan 2010 Location: Springfield, Illinois Device: Kindle PW, Samsung Tab A 10.1(2019), Pixel 6a.	As an American, I'm not sure I fully understand this issue. Amazon charges tax in any US State in which they have a physical presence, and the taxes charged when I purchase from my home in Illinois is different from the taxes charged when I purchase when in Texas. I have no idea what physical presence Amazon has in either state!

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