Australia - Federal Government reveals plans to extend GST to digital products In the Australian Federal Budget released on 12 May 2015, Treasurer Joe Hockey revealed plans to extend the Goods and Services Tax (GST) to "intangible" digital products supplied by overseasbased companies. The proposed expansion of the current tax laws is intended to address tax avoidance by multinational companies, including 30 companies specifically identified by the Federal Government, and has been dubbed the "Netflix tax". Shortly after the announcement, the Federal Government released an Exposure Draft Bill to extend the scope of the GST to offshore supplies of intangibles and services to Australian consumers, effective from 1 July 2017. In addition to supplies of digital content, games and software, consultancy and professional services performed offshore for customers in Australia would fall within the scope of the Bill, including services like holiday rentals on Airbnb and Uber's car-sharing services. At present, only physical goods imported from overseas valued at over $1000 are subject to the GST. However, at this stage, it appears that the new laws will capture all intangible supplies, regardless of their value. When announcing the proposed changes, Mr Hockey explained that "when the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and eBooks from overseas". The proposed amendments, which are modelled on similar rules currently in operation in the EU and Norway, would permit GST liability to be shifted from a foreign supplier of digital services to an Australian operator in certain circumstances. A copy of the Exposure Draft Bill is available here. A copy of the Exposure Draft Explanatory Statement is available here. For more information, please contact Anne-Marie Allgrove, Toby Patten, Jarrod Bayliss-McCulloch or Grace Loukides.