Have you heard about the latest international e-commerce shake up? If you run a U.S.-based, online retail operation that sells to Australians, then stop and take 3 minutes to read this. It’s important.
Australia implemented a new goods and services tax (GST). In response, Amazon’s killing overseas’ shipping to the continental country. Starting on July 1, Australians will no longer be able to order products from foreign outposts like Amazon.com or Amazon.co.uk. Instead, they’ll be confined to Amazon.com.au.
The New Australian Internet Tax
Starting on July 1, Australia is adding a GST levy to every overseas purchase under $1,000 — a cost Amazon would have to absorb. So, to avoid the hassle, the online retail giant is curtailing foreign shipments to the Oceania nation.
What is Amazon doing to help overseas product sellers who regularly sold to Australians?
Amazon set up a “global store” inside Australia and populated it with 4 million items once only available via the mother ship, Amazon.com.
Vendors who regularly sold to consumers in Australia via Amazon.com should contact the company to discuss the possibility of partnering with Australia’s global store. If you’d prefer to have someone handle it for you, give us a call. Our team of e-commerce attorneys can spearhead the process.
Why did Australia introduce this new e-commerce tax?
Like many countries, Australia explored the impact of e-commerce on its economy. And ultimately, lawmakers reasoned that certain types of tariffs and taxes were a necessary evil, to “level the playing field.” Treasurer Scott Morrison explained (while simultaneously swinging for Jeff Bezo’s perch):
“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, and they won’t under these new laws to be introduced from July 1 that level the playing field.”
Many Australian users haven’t taken kindly to the news. Sandy Lancely tweeted:
“Amazon AU has little selection & higher prices, Amazon US has been popular with Australian consumers for some time. Not just price, but choice too.”
For its part, Amazon apologized, citing the concomitant vagaries of running a multi-national conglomerate:
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites.”
Analysts report that Australians “spend about $25 billion a year online, with about $6 billion spent on overseas e-commerce sites.”
EBay and the Chinese online juggernaut Alibaba are not abandoning shipments to Australia. Instead, both companies are altering their international accounting practices to accommodate for the new Australian “Amazon tax.”
Connect with an International E-commerce Attorney
Gordon Law Group loves working with e-commerce entrepreneurs and businesses. We handle everything from tax remittance to intellectual property formalities. If you need someone to handle a counterfeit case or an experienced negotiator to navigate an FTC “unfair and deceptive” marketing investigation, we’re here and ready to advocate fiercely on your behalf.
Our team enjoys a 9.9 out of 10 on venerated lawyer review site AVVO.com. Lawyers Magazine has also recognized our practice as a top firm.
Personalized attention is a cornerstone of our firm’s philosophy. We won’t shuffle you among transient summer interns. Instead, every client works with an experienced lawyer, who stays with you from start to resolution.
Get in touch. Let’s discuss getting you where you want to be.