eBay: “Netflix tax” effective 1 July 2017

Copying an email I received, couldn't find anything online.

Important: “Netflix tax” effective 1 July 2017
From 1 July 2017, Goods and Services Tax (GST) will apply to fees on eBay.com.au, due to new legislation in Australia (the "Netflix Tax").

Businesses registered for GST will not be affected by this change if you register your Australian Business Number (ABN) with eBay here.

More information on this new legislation can be found here.

Regards,
The eBay Team"

http://mail.ebay.com.au/r/mail/11c42II3fcb4eII1b8f1b583f4II2

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Comments

  • +1

    Will they provide a tax invoice for fees so I can claim the GST on it?

    • Unfortunately it's GST on sellers fees, not on the goods themselves.

      • I know, but they must provide a tax invoice if the fees are including GST no?

        Currently eBay fees are not a tax invoice

        • From eBay when I asked:

          If you are not eligible for an ABN, GST will be applied to your fees on ebay.com.au.

          From your July invoice, if you've registered your ABN, you’ll be exempt from GST and it won't appear on your invoice.

          If you haven't registered your ABN or you're not eligible for an ABN, GST will appear as a separate item on your invoice.


          All I know is any GST paid can get claimed back any who.

        • Yes/No…. If the price is over $82.50 then yes, a tax invoice MUST be given, under $82.50 it also has to be given if requested

          https://www.ato.gov.au/Business/GST/Issuing-tax-invoices/

          Currently, ebay fees are 'gst free'. Hence no invocie.

      • WHy is that unfortunate? It's good news that the Amazon tax has been deferred. It's good news that eBay pay GST on their revenue just like all other Australian businesses.

        If you'd rather eBay avoid paying GST, the government can always bump up your personal income tax to make up for the shortfall in taxation revenue.

        • Unfortunate in the context of TRS.

        • @Frugal Rock:

          So you want the Amazon tax and hence GST is applied to the value of the goods and then you just pay 10% more, then get it back at the airport?

          Wrong forum topic if you are talking about the Amazon tax.

        • @matt-ozb:
          You brought up the Amazon tax, not me. I'm concentrating on your GST-free food argument fail.

        • @Frugal Rock:

          How will you show your eBay services at the TRS counter?

        • @matt-ozb:
          When am I doing that?

        • -1

          eBay doesn't pay GST, you the end consumer does. eBay simply collects it from you and forwards to government.

        • @sylon:

          That's not correct.

          eBay now has a tax obligation to pay GST.

          Whether they choose to pass on that cost in your selling fees is an internal decision for eBay.

          Here is an example with Adobe now required to pay GST to the ATO for their electronic services.

          https://helpx.adobe.com/au/x-productkb/policy-pricing/au-gst...

          Obviously the 10% is not being absorbed by these companies as it is easy to pass on to consumers as an extra 10% GST cost.

  • +40

    Yup. Pretty ridiculous if sellers have to pay GST on the shipping commission ebay charges. That's tax on a virtual service that doesn't exist.

    • +1

      What is shipping commission and why are they charging this?

      • +9

        OK, back in the olden days, actual shipping wasn't part of the final value fee, as sellers actually paid it at the post office, but then Chinese sellers started selling $1 items with overpriced shipping to avoid commissions, so now ebay charges their fees calculated on item value + shipping, seller still has to pay the shipping charge at the post office and ebay get a commission on the actual shipping charge. If you pay $30 on shipping, seller has to pay 10ish per cent of that in extra charges even though they haven't profited.

        Bottom line is, yes, a seller can go backwards on a transaction. Quite easily. The fees can cost more than the item value. There are certain weights, shapes and values of items that would be stupid to try and sell from Australia via Aus Post.

        • +1

          Ah really, I have been selling for years and didn't realise this development, what's the point of having a separate shipping charge then? I guess you may not have to refund the shipping in some instances where there's an issue maybe?

        • @Jackson: Depends on your sorting / search, your item will appear top. It's a matter of marketing IMHO.

  • +12

    wish someone would make a ebay copy to take over ebay needs to go away with percentage based listings. It's insane the fees they charge.

    • +14

      There's a few but without many users, it's pointless.

    • +9

      gumtree tried, but ebay brought them out and squashed the 'growth'…

      aliexpress, banggood are basically 'ebay' but for companies coming out of china.

      • +1

        Gumtree is still amazing for little things you want to find or get rid of - with no fees for the simple stuff.

        If it ever turned non-free things will get really bad.

      • +4

        Where did eBay bring them to?

        • haha always one. Yes should have been bought!

    • +10

      New Zealand's equivalent trademe.co.nz is awesome. eBay didn't take off in N.Z. Wish trademe would start up here and show eBay how it's done.

      • Really? I missed eBay when I was in NZ. Trademe seemed expensive in comparison, extremely limited product wise and the website was archaic (in 2013). I presume it's much better for sellers vs eBay? eBay definitely need to improve in that department.

    • +1

      Facebook buy/swap/sell marketplaces are great, i've gotten heaps of things on there

    • +1

      Last I heard Facbook market place is making it hard for Ebay. Cant say I feel sorry for them.

    • https://au.carousell.com is complete free, user friendly and getting big.

  • +16

    It's already bad enough for sellers with the ridiculous fees and "fast and free" shipping.

  • So if I sell anything on ebay I have to declare the associated fees on my tax return?

    • +6

      I think this is just code for them jacking up seller fees.

      • But if this is a reaction to the scrapping of the $1000 threshold it shouldn't affect local sales?

      • No fee jacking, as that 10% GST will be passed through to the gov.

      • I think it is just code for tax legislation which eBay were able to avoid in previous year (unlike all other Australian businesses), but te ATO have caught up with them.

        Wouldn't you have rather have eBay operate fairly in the Australian market and pay their taxes?

        • As I mentioned elsewhere, ebay charges commission on shipping, which funnily enough goes to actual shipping costs which have GST applied. There is no tax legislation regarding applying GST on ebay fees involving shipping which have already had GST applied and paid for.

          ebay applies a fee on top of an already taxed shipping service. What is fair about applying a tax on top of a fee on top of a tax?

          There is also no requirement for the payment of GST to be passed on to sellers. ebay are choosing to pass it on. They are using weasel language to pretend that it must be passed on. The ATO doesn't care if ebay pays it or sellers do or somewhere in between. Where is the legislation that sellers must pay it and ebay cannot pay the GST for their service themself?

        • @Frugal Rock:
          where have ebay said they are passing on the costs of their obligation to pay GST to the ATO?

        • @matt-ozb:
          They confirmed in their email today what everyone except you knew would happen.

        • @Frugal Rock:

          Yep. Just received. Bit dodgy how eBay are simply just applying 10% to our fees when it is really eBay's tax to pay to the ATO, but no surprises they are passing on their extra tax costs.

    • +1

      That seems to be talking about international transactions. The wording of this email suggests it's for all sales?

    • Please do not confuse the Netflix tax with the Amazon tax. Ironically this change is due to the Netflix tax which only covers fees from suppliers e.g. Netflix, eBay and other subscription based services.

      It was announced at the federal budget that the Amazon tax has been put on hold until July 2018. Pretty sure the government is coming to realize that the amazon tax won't work, amazon and eBay are virtually a search engine for overseas stores, amazon and eBay never see the money so how are they expected to collect a tax.

  • +12

    It's a scam. They just want to increase fees by another 10 %

    • +1

      Do you know how GST works? The 10% will go to ATO

      • Yes, but that 10% should be coming out of eBay's existing fee structure. Instead for sellers it's 10% GST, 10%> final value fee's, and 3.5% paypal fee's. That's laughable.

  • What does "Netflix tax" mean? What has Netflix have to do with anything?

    • +5

      They are the ATO's internet service examplar for collecting GST online.

    • +19

      I know it as the "Gerry Harvey" tax, since he's the one lobbying the government to protect him from competition.

      • Nothing to do with the Gerry Harvey tax. Gerry wants an import tax and GST tax applied to imported goods. This has NOTHING to do with that.

        This is the GST on the fees that eBay charge. Why should eBay be able to avoid paying GST different to all other Australian businesses over $75K revenue?

  • +1

    whats the effect for us, buyers?

    • +22

      Sellers jacking up prices to recoup the fees.

      • Only small sellers, bigger sellers (earning over $75,000) should be registered for GST and can claim it back (or apply for the exemption). It SHOULDN'T make any difference.

      • -4

        Doesn't make sense unless you have confirmation will increase their selling fees to sellers.

        Please provide evidence of this.

        • +1

          Like the email they sent to thousands, if not hundreds of thousands of people?

        • +1

          @fatpizza:
          Read it again more carefully. I don't think eBay have confirmed they are passing on their GST obligation by increasing their fee to sellers.

          eBay just did they are charging GST. The sellers' fees might be unchanged.

        • @matt-ozb:
          Lol. I'm framing this one.

        • @Frugal Rock:

          My wishful thinking, but still, many people did not read the first email very carefully.

          Anyway, I dont really care. An extra 10% on the ebay fee is not much for me at the moment. I no longer have a $1K/mthly ebay fee bill.

  • +9

    As a small business seller and not registered for gst it's a kick in the a$$ with a 10% increase in my fees …..

    • +5

      Yeah, I just sell a few items here and there. Not at all to make a profit.

  • Can we expect PayPal to follow with the edition of gst ?

    • +1

      No because with PayPal it's a transaction and not a sale.

      • PayPal charge a fee though. Goods and Services tax.

        • +3

          Financial transaction fees are GST free.

        • @gadget: I receive credit card payments through my Westpac merchant facility. They charge me GST. What is the difference with Paypal?

  • +3

    I have personally absorbed fee and postage increases over the past 18 months or so but is getting to the point it's either close up or increase my prices to cover the costs ……so it's the consumer that suffers

    • -1

      Where have eBay said they will increase eBay sellers fees to the seller?

  • +2

    eBay should be absorbing the GST into the 9.9% fee they are currently charging (but of course that is wishful thinking).

    So if I'm understanding this correctly, from 1st July, sellers will be paying a 10% GST on the fee eBay charges for the sale of each item.

    So let's say I sell a $100 item with $10 postage.

    eBay's fees are $9.90 plus $0.99 = $10.89

    Then I'll need to pay GST on this - so in total I will be paying $11.98

    Is this correct?

    • +1

      One could say 9.9% already appears to include GST, very strange they chose 9.9% when eBay US is 10%

    • If eBay charges you $10.89 inc GST I don't think you add more GST to it, you can't tax a tax (unless it's petrol, but save that for another day)

      • +1

        Yes but does eBay include GST already in their fees?

        My example above is indicative of what you will be currently paying in fees if selling a $100 item with $10 postage.

        ==> You will be paying $10.89 in fees (today)

        I thought the email is saying that from July 1st you will need to pay 10% GST on the fees —> hence $11.98

        Or am I missing something?

        • The fees do not currently include GST so yes you should end up getting charged $11.98 in that instance.

          It will basically only hurt private sellers or very small businesses. Larger businesses already registered for GST will either be exempt or claim it as a credit.

  • +2

    The email above seems to refer to increased fees for Australian businesses on eBay unless the business is registered for GST & provides eBay with their ABN.
    The so called Netflix tax is about charging GST on (subscription based?) digital downloads.

    It is different from the proposed GST (admin) issue eBay / Amazon etc. Is having with the Federal government.

    Netflix legislation is at the end of article
    https://www.google.com.au/amp/thenewdaily.com.au/money/your-...

    • It's effectively them saying, if you are already collecting GST and can prove it, we don't have to do anything as that meets the government's requirements. If not 'eBay' have to start collecting GST on your behalf as the government is treating them as the seller and requiring them to collect the GST for your sale.

      This is one and the same. Basically eBay have to make sure GST is charged on everything sold through their platform. Technically that might mean blocking everyone in Australia from ebay.com and only allowing ebay.com.au where they have either charged the GST and forwarded to the government themselves, or verified that the seller is already charging that GST. It's irrelevant if it's a digital download, the GST applies to goods and services.

      The EU has been doing this for more than a decade.

      Edit: I actually misread that, what I said above is what sellers of digital goods are doing. In this case eBay is just doing it for fees. Weird. I don't see why what I said doesn't make sense, maybe that will be email 2 from eBay.

  • +5

    So tax sellers on eBay and this cost will be passed on to buyers and allow Amazon to enter Australia so local businesses go bust. They're screwing both buyers and sellers, WTF???!?

    • It's aimed at the core demographic of Liberal donors who own Australian businesses that already collect GST, who will be unaffected / advantaged by this change because they will no longer be competing against other sellers who don't charge GST. At least on ebay….

    • You are confused. Nothing to do with Amazon.

      This is GST on the selling fees paid by eBay to ATO.

      You are confused with another piece of proposed legislation:
      https://www.lifehacker.com.au/2017/03/six-questions-we-have-...

      • I know it has nothing to do with Amazon, I'm saying it's bad economic policies.

        • You need to Google 'Amazon tax' and Netflix tax'.

          Buzz words for some current Australian tax legislation changes. You are confused between the two.

        • @matt-ozb: Who said anything about Amazon tax?

  • +2

    more ebay tax

  • +6

    I thought they were going to close their Australian operation. Wimps.

    • +1

      That's the other issue about charging GST on transactions under $1000 from overseas. Not likely to see that until 1 July 2018, if ever.

      eBay were threatening to close the Australian eBay from international sellers which from an Australian economy point of view would probably be a good thing. They were still going to let Australians sell to Australians.

      • Here the ATO makes it look like it's a done deal if you don't read closely - they say "This change will apply from 1 July 2017" so I had assumed it already passed because of the language. They do go on to say it's currently before the house, but until then it's not specific. Granted I'm not used to how this sort of thing is worded here - maybe this is normal - but in Canada if it's only proposed, they usually refer to it as proposed upfront.

        I was somewhat surprised something that half-baked would have passed. Almost every country enforces this at the border for a reason….

        • The way many of these things work, is the government can put them in the budget and people have to start collecting the tax right away (or next financial year anyway). Then if it doesn't pass it's a bit of a mess. Last time this happened was with the 'alcopops' tax. It was introduced first, but the legislation to validate the collection of it was passed later.

  • +9

    This is a tax they should always have been paying. I'm honestly surprised eBay haven't been required to pay GST in the past.

    While it will hit the buyers and sellers, it has essentially given eBay as a selling platform an advantage over any Australian owned platform, or alternatively Australian businesses that use their own website.

    eBay should reduce their fees, but given they have expensive fees in the US, I doubt we will be so lucky.

    If a business is registered for GST it won't impact them on eBay as they will be able to claim back the input credit. It will just impact the rest of us.

  • So this doesn't effect private sellers?

    • Yes it does. It's a 10% increase for private sellers. It doesn't really affect businesses that are registered for GST.

      • When have eBay advised the GST that they pay to the ATO will be transferred back to sellers with an increase in the selling fees?

  • +9

    Hurry up Amazon!!!

    • No we can't have Amazon here, I don't want poor old Gerry Harvey to have to work out how to register at Centrelink.

    • -3

      You are confused. Nothing to do with Amazon.

      This is GST on the eBay selling fees paid by eBay to ATO.

      You are confused with another piece of proposed legislation:
      https://www.businessinsider.com.au/australia-is-introducing-...

  • It appears this tax is supposed to be enforced on international sales of digital products to Australian consumers if I'm not wrong?

    • +1

      I politely think you are wrong. "From 1 July 2017, Goods and Services Tax (GST) will apply to fees on eBay.com.au, due to new legislation in Australia (the "Netflix Tax")."

      I expect all sellers to be slugged GST costs on fees unless they are businesses already handling GST .

  • +15

    Isn't it great how Turnbull is increasing taxes on individuals - 50% of whom live paycheck to paycheck - whilst at the same time reducing taxes that business pays thereby ensuring that the rich do not pay tax.

    The Top 500 business by market cap in Australia pay an average of 2% tax. The higher up the list they are the less likely they are to be making up that 2%.

    It's simply remarkable that come election time the same enemies get into power. Because they are an enemy: they're stealing your shit.

    • +4

      To be fair, all other Aussie businesses have to charge GST for goods or services provided, it's amazing eBay has gotten a away with doing so for so long, this is simply just righting past wrongs. I have sympathy for those who live paycheck to paycheck who buy or sell things on eBay (presumably the ones who will cop an increase in fees) but letting international businesses get away with their tax obligations isn't the answer to the poor.

    • Have you tried writing or speaking to Mr . Turnbull or Mr. Hockey, its not too hard to get to them but of course you cant just be keyboard warrior. Unless you have nothing to hide, just write and speak to them and tell you want to pay 2% tax as well. I am sure they will oblige if you have a good reason. LOL

  • +2

    If it goes from 10 percent to 20 perfect final value fees Ebay is dead to me for selling anything.

    If it goes from 10 percent to 11 percent its meh….

    Ebay might well deserve it. Its been pushing hard with online traffic with all its recent coupons/vouchers.

    I recently got a $10 off for spending $30. Add cozy5 its pretty good buying a buyer plus cashrewards. LOL….

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