Hockey confirms GST will be imposed on ebooks from mid-2017

Federal treasurer Joe Hockey has announced the government will extend the 10% GST to digital downloads, including ebooks, from overseas from 1 July 2017, under new measures introduced in the 2015-16 federal budget.

According to the budget papers, the government expects the changes to apply from the beginning of the 2017-18 financial year, when it has forecast revenue from the new measure to total $150m, followed by another $200m in 2018-19.

‘It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST,’ said Hockey. ‘When the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and ebooks from overseas.’

Australian Booksellers Association CEO Joel Becker said the changes are a step in the right direction, but he wants to see the GST imposed on all overseas purchases. ‘It drives home the point that the technology is there to charge GST to all goods and services coming from offshore,’ said Becker.

Under current legislation, Amazon is not required to charge GST for ebooks purchased in Australia through its overseas Kindle stores, although it does charge GST for ebooks purchased through its Australian Kindle store, which it launched in 2013. An Amazon spokesperson was contacted for comment.

An Apple spokesperson told Books+Publishing the company already pays GST on all iTunes sales in Australia, including ebooks. 

As previously reported by Books+Publishing, in April Hockey flagged changes to GST on international downloads. He has also raised the prospect of applying GST to international online purchases under the $1000 threshold, however, the states are yet to agree to this move, with Western Australia still holding out.