Australia’s Treasurer Joe Hockey has laid out plans for a federal tax on Netflix and other digital services, expected to be formally announced in tonight’s federal budget.
The “Netflix Tax” will see Australian’s paying an extra a 10% GST for access to the streaming site and digital products like it, so as to raise $350 million over the next four years, which Hockey says will go to the states.
“It is plainly unfair that a supplier of digital products in Australia has to charge GST and an off-shore supplier does not,” he said. “When the GST legislation was drafted it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and e-books from overseas.”
The tax will also apply to digital music, movies, software and ebooks – so let’s just go ahead and label this one a tax on fun, OK? The good news is that the new tax won’t affect your iTunes purchases, because we already pay GST on those. Silver linings.
Hockey’s confirmation of the tax follows reports that the Australian government is aiming to crack down on tax avoidance by multinational companies. Hockey also said the government would take the time to “properly consult” on the measure, before the GST proposal is taken into effect.
The Australian federal government will unveil its second budget tonight.
