First announced in the 2018 budget, Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 has since been passed, ensuring that offshore sellers of Australian hotel accommodation calculate their GST turnover in the same way as local sellers from 1 July 2019.
Unlike Australian-based businesses, offshore sellers of Australian hotel accommodation were previously exempt from including sales of hotel accommodation in their GST turnover.
These offshore sellers will now need to add GST when Australian-based sales exceed $75,000 in a 12-month period.
Types of accommodation impacted by the change include hotels, motels and hostels; serviced apartments; student accommodation; caravan and tourist parks; house boat hire or cruise operators; and bed and breakfast accommodation.
“We’re pleased to see this loophole closed,” ATO deputy commissioner Deborah Jenkins said. “This change removes the competitive advantage that offshore sellers had over domestic accommodation providers. It also allows businesses that book accommodation through offshore sellers to obtain a tax invoice and claim GST credits.”
Ms Jenkins added that the change doesn’t affect offshore agents that organise Australian accommodation on behalf of domestic accommodation providers.
“If you purchase through an offshore agent, you will generally pay the hotel provider directly and they will charge you GST and provide a tax invoice.”