ATO outlines low value GST compliance action
The Tax Office has outlined its compliance approach for small businesses' GST obligations for the sale of offshore low value goods to consumers, including hefty penalties.
From 1 July 2018, GST will apply to sales of low value goods sold to consumers, with businesses that meet the $75,000 registration threshold will need to register for GST, charge GST on relevant sales and remit the GST to the ATO by lodging returns.
The ATO has laid out is compliance focus ahead of the deadline, noting that consequences for non-compliance will include imposing an additional 75 per cent administrative penalty, calculate the liability and issue an assessment; and take recovery action for the debt.
Where a business has tried to be compliant, the ATO will not impose any penalties from 1 July 2018 to 30 June 2019, and instead request for corrections to be made.
According to the Tax Office, it will use a number of information sources, including financial data tracking and customs data to track non-compliant businesses.
“From 1 July 2018, offshore low value goods, $1,000 and under, supplied by retailers to Australian consumers will be taxable supplies and subject to Australian GST,” a PwC release noted.
“Under these changes, the vendor collection model will be used for collecting GST, whereby vendors (including online marketplaces and ‘redeliverers’) will collect the GST on low value imported goods at the time of sale.
“The ATO has already commenced compliance activities for the inbound intangibles measures introduced in July 2017, and has issued assessments in instances of non-compliance. We would expected the ATO will take a similar approach in relation to the low value goods measures. The ATO has also clearly stated it will use all available powers to ensure compliance.”