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UNCLASSIFIED – The Australian GST Reforms

The Challenges of Digital Trade & Effective Policy Responses - Australian GST Reforms. Tim Dyce Deputy Commissioner Australian Taxation Office Conference on the Digital Economy and Tax Authorities - Montréal May 2019. UNCLASSIFIED – The Australian GST Reforms.

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UNCLASSIFIED – The Australian GST Reforms

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  1. The Challenges of Digital Trade & Effective Policy Responses - Australian GST Reforms Tim Dyce Deputy Commissioner Australian Taxation Office Conference on the Digital Economy and Tax Authorities - Montréal May 2019 UNCLASSIFIED – The Australian GST Reforms

  2. Australian GST reforms: Overview • The role of platforms • Recent GST cross border changes Platforms are responsible for collecting the GST, when goods or services are sold through them. • Legislative changes over the last 2-3 years have changed the risk landscape and the administration of GST and VAT globally: • UNCLASSIFIED - Australian GST reforms • 4 • Early results • Multinational Anti-Avoidance Law (2016) • GST treatment of cross‑border transactions between businesses (2016) • Diverted Profits Tax (2017) • GST on imported services and digital products (2017) • Low value imported goods (2018) A lower number of businesses have been required to register. This has enabled a greater opportunity to support a small client base who are new to the Australian GST system. Over 1,500 overseas businesses, including the major platforms, are registered in the simplified GST system for non-residents GST

  3. Australian GST reforms: The role of platforms • UNCLASSIFIED - Australian GST reforms • 4 • Engaging with platforms and compliance

  4. Australian GST reforms: Our experience • UNCLASSIFIED - Australian GST reforms • 5 • Engagement and Compliance

  5. Australian GST reforms: revenue collected $81m • GST collected by platforms on digital products and services • UNCLASSIFIED - Australian GST reforms • 7 • From 1 July 2017 to 30 September 2018: • More than 500 businesses registered in the simplified system including platforms • Platforms account for GST on taxable sales made through them • 36 per cent of revenue was collected by the top 5 platform entities, this includes • Fees to use the platform • Sales by third parties • 85 per cent of revenue was collected by the top 30 entities (top 10 platforms and 20 merchants) $343m

  6. Australian GST reforms: revenue collected • GST collected by platforms on goods under AUD1,000 • UNCLASSIFIED - Australian GST reforms • 7 • From 1 July 2018 to 30 September 2018: • More than 1,000 businesses registered including multiple platforms • Platforms account for GST on taxable sales made through them • This relieves many small businesses from having to register • 49 per cent of revenue was collected by the top 5 platform entities • 80 per cent of revenue was collected by the top 30 entities (top 10 platforms and 20 merchants) $81m

  7. Australian GST reforms: Engagement • UNCLASSIFIED - Australian GST reforms • Early engagement with platforms is important • Our increased understanding of business models has helped us better support impacted business including platforms • Significantly reduced potential registration numbers • Increased opportunities to provide targeted one-to-one support • Platforms want to comply and are complying • The Australian experience • 8

  8. Australian GST reforms: Looking ahead Driving Willing Participation • International shift toward event based GST/VAT reporting • Assuring the right amount of tax • Compliance activities ranging from education to support and review activities • Whole-of-tax payment thinking • Transforming through simplifying, automating and integrating our administration of GST • UNCLASSIFIED - Australian GST reforms • 8 • Countries progressing toward mandatory electronic filing, include: • United Kingdom – making tax digital with integrated accounting software, dedicated VAT account and digital lodgment. • Poland, Italy, Romania and Russia have introduced real-time GST/VAT data and payments. • Brazil, Mexico and China – have implemented digital invoice requirements to substantiate business transactions. • Look a for opportunities to leverage technology and third party data to pre-fill a GST return. • For example using – e-invoicing, the Australian banking system’s ‘new payment platform’, block-chain or artificial intelligence. • Simplify and improve compliance • Simpler GST reporting and bookkeeping requirements. • Look for opportunities to tackle risk at the source by applying withholding or real-time systems to collect GST. • Integrate • Our journey has begun, we are realigning to whole-of-client focus. • Seamlessly integrate GST reporting into external systems and platforms used by clients. • Automate

  9. Questions? UNCLASSIFIED - Australian GST reforms

  10. Thank you UNCLASSIFIED - Australian GST reforms:

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