'Netflix Tax' Proposed in Australia

Josh WolfordBusiness

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Netflix is going to cost a little more in Australia.

Treasurer Joe Hockey has confirmed reports that the new budget will include a plan to charge a 10 percent Goods and Services Tax on online services based outside of the country.

From Gizmodo Australia:

According to Hockey, this GST extension wouldn’t apply to products that cost under $1000 imported into Australia. That’s because the Treasurer agrees with a 2009 Productivity Commission report which said that would cost more to enforce than it would make in tax revenue. Hockey said in a press conference that the Government would go to tech companies and ask them to hike their prices by 10 per cent and send that extra revenue to the Government in the form of a tax.

"What we’re doing is going to digital providers overseas and saying ‘can you apply the GST to the products you provide into Australia?’. They [the tech companies] are agreeable to it. It’s not their profits [being taxed]. It’s a tax collected and they remit it back to the country where that [consumption tax] occurs," said Hockey.

Netflix went live in Australia and New Zealand back in March.

“It is not fair to taxpayers, or to retailers or their many employees, to exempt overseas online retailers from the GST even if some consumers are enjoying the ride,” said Hockey.

Netflix is currently cheaper than Australia-based competitors, Hockey argues due to not having to incorporate a GST into their price points. According to him, this will level the playing field.

Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf