We regret any inconvenience this may cause’: Amazon to stop shipping to Australia from July 1

AMAZON will stop shipping overseas purchases to Australia from July 1 in response to the government’s GST changes.Ads by Kiosked
TREASURER Scott Morrison says he “doesn’t apologise” for the government’s decision to push ahead with controversial online GST changes despite Amazon cutting off access to its overseas sites as a result.

The e-commerce giant announced on Thursday it would stop shipping overseas purchases to Australia from July 1 in response to the new laws, which require overseas businesses to register with the Australian Taxation Office to collect GST on all goods sold, including purchases under the current low-value threshold of $1000.

“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.

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

“Amazon will continue to operate in Australia via its Australian site, which will now offer an expanded range of products. A level playing field will help Australian businesses grow and create more jobs and opportunities.”

Mr Morrison added, “The second biggest company in the world, run by the richest man in the world, shouldn’t get a leave pass from paying tax in Australia.

“If multinationals aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia, on our own main streets and in our shopping centres.

“I’m disappointed, but not surprised, the Labor Party has once again chosen to side with the big multinationals to try and protect them from paying their fair share of tax in Australia.”

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”.The local site, which has more than doubled its product range since its lacklustre launch in December was widely panned by shoppers, still has a fraction of the estimated 500 million products available on Amazon.com.

“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 email said.

“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.”

The email then offered customers a $20 voucher for their next Amazon.com.au purchase “to welcome you” and “thank you for choosing to shop with us”.

An Amazon spokesman said the company “had to assess the workability of the legislation as a global business with multiple international sites”. “Based on our assessment, we will redirect Australian customers from our international sites to Amazon.com.au,” he said.

The company, along with other e-commerce giants, first flagged potentially blocking Australian users if the controversial online GST changes went ahead during a Senate economics committee hearing last year.

In response to Amazon’s announcement, eBay and Alibaba both confirmed they would not be blocking Australian users.

“eBay customers love the fact that we have a huge selection of over one billion listings across eBay’s global marketplaces so we are working on a solution that enables Aussie buyers to continue to shop from all eBay sites, while also capturing the required GST,” an eBay spokesman said.

“This requires major changes to eBay’s global systems and we are working to have these ready by July 1.

“eBay’s GST solution will allow us to collect GST in any currency, from any seller, from any eBay site. It also allows imports to Australia to continue without any structural barriers, redirects or blocks to the buyer experience.”

An Alibaba spokesman said it was working towards meeting the deadline. “The implementation of this tax is difficult and requires many changes to Alibaba’s systems,” he said.

“At this stage our priority is to ensure that we prepare the business for the change on July 1 and that the consumer experience on our platforms is not adversely impacted by these changes.

“Alibaba Group has been forthcoming about its concerns with the GST collection model. Last year we participated in a number of public hearings, where we outlined our concerns around the collection of GST by e-commerce platforms.

“Treasury modelling indicates that 75 per cent of goods by value imported into Australia will continue to go untaxed under this model.”

Kevin Willis, Amazon’s director of global trade services, told the Senate committee last April that in his decades of experience with cross-border trade tax policy development, there “has never been a tax of this magnitude”.

“The vastness and complexity, the number of players we’re talking about, which grows daily as cross-border commerce takes hold, it’s difficult to quantify what the implementation costs are, as well as any impact on revenue,” he said.

“From our perspective that’s going to be dictated by the behaviour of the consumers, so there’s a big challenge how we go about this. Timing — I don’t see timing as a solution. It really doesn’t fix the fundamental flaws in the collection model.”

Mr Willis said retailers would typically be given several years to prepare for changes of this scale.

“A lot of this is going to have to do with the infrastructure that’s going to need to be built and continually updated and refreshed to make sure we are linking the appropriate parties,” he said. “In a marketplace we don’t touch those goods, they’re not moving through the Amazon logistics system, so we have to work out where they originate from.”

frank.chung@news.com.au