ATO finalises rulings on application of GST to low value goods

The Australian Taxation Office (ATO) has finalised and issued the following taxation rulings in relation to the application of the goods and services tax (GST) on low value imported goods:

  • Law Companion Ruling LCR 2018/1, which discusses the new rules which apply from 1 July 2018, and ensures that Australian GST is payable on offshore supplies of low value goods that are purchased by Australian consumers.
  • Law Companion Ruling LCR 2018/3, which discusses the amendments that make a ‘redeliverer’ responsible for GST on an offshore supply of low value goods brought to the indirect tax zone.

In addition, Law Companion Ruling LCR 2018/2 was finalised, and explains how GST will apply to supplies made through electronic distribution platforms (EDPs). This ruling applies to supplies of digital services and digital products for tax periods starting on or after 1 July 2017, and in respect of offshore supplies of low value goods for tax periods starting on or after 1 July 2018.

For further information concerning the application of the GST to imported low value goods, see our TaxTalk Alert, which was published on 29 March 2018.

Australia signs Trans-Pacific Partnership Agreement

Australia has signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11). This Agreement is a separate treaty that incorporates, by reference, the provisions of the earlier TPP Agreement (signed on 4 February 2016 in Auckland, New Zealand, but not yet in force), with the exception of a limited set of provisions to be suspended.

Significant benefits have been obtained through the Agreement for the agricultural sector, such as the Australian beef market which will benefit from further tariff cuts in a new bilateral agreement the Government has secured with Canada through a side letter. Also, Canada will eliminate its 26.5 per cent tariff on Australian beef imports over five years, instead of the 10 years agreed under the original TPP deal. Another key side letter outcome for Australia is Japan’s tendering process for rice, which will now offer tenders six times a year.

Update on Trusted Trader programme

The Mutual Recognition Arrangement with Hong Kong under the Australian Trusted Trader programme came into effect on 1 March 2018. More than 140 accredited Australian international traders will now potentially have access to faster, more secure, and more reliable border clearance for their exported goods. For further information about the Trusted Trader programme, refer to our TaxTalk Alert, which was published on 5 March 2018.