The Business to Business (‘B2B’) non-resident supplier changes to GST are now in force!

Legislation introducing what was referred to in the media as the ‘Netflix Tax’ is now black letter law. The first draft of significant GST changes effective 1 October 2016, relate to Business to Business (or ‘B2B changes’) and intangible supplies e.g. services, rights, leasing etc.

These changes are promoted as being primarily positive in nature as they may broadly allow some of those non-residents currently registered and charging GST on intangible supplies to de-register. However, the changes are somewhat broader than when first announced and as previously anticipated.

B2B Changes

Organisations in the following categories will likely be impacted and therefore will need to consider the impact of the changes which are now in force:

  • Non-resident entities (which are registered for GST) making intangible supplies to Australian business customers and charging GST
  • Australian entities acquiring intangible supplies from non-resident entities as per above (in particular those that are not entitled to claim full input tax credits)
  • Australian entities that have or are part of arrangements relating to the use of an overseas procurement hub (e.g. based in Singapore)
  • Australian entities that have a contract with a non-resident entity under which the Australian entity is directed to provide intangible supplies to an Australian business customer
  • Non-resident entities importing goods and providing related installation/assembly in respect of those goods
  • Australian and non-resident entities importing goods into Australia (i.e. entities will be able to choose to use an uplifted value rated than actual values for transport and insurance in valuing a taxable importation).

(Please note this list is indicative only and not exhaustive).