Changes to the Goods and Services Tax (GST) mean that from 1 July 2017, overseas vendors, electronic distribution platforms and goods forwarders with an Australian turnover of $75,000 or more will need to register for, collect and remit GST for intangibles, services and goods up to $1,000 supplied to consumers in Australia.
With less than three months until the changes come into affect, BDO tax partner Fady Abdallah is concerned that some offshore suppliers are procrastinating in making the necessary changes to ensure they comply with the new requirements.
“Some offshore suppliers have delayed the implementation of system changes necessary to manage the new compliance and liability obligations,” Mr Abdallah told Accountants Daily.
“These include the implementation of new systems designed to capture relevant data to assist in the determination of the liability or in fact support the position that no liability arises.”
Mr Abdallah said that there are significant risks involved in delaying this process any longer.
“The risk is that a GST liability may arise in circumstances where the offshore supplier has no ability to impose or recover any GST from the Australian consumer, thereby leaving the supplier to fund the GST liability from the existing proceeds,” he said.
“This may have a direct impact on the suppliers' profits.”