Yes, Australia Is Getting A 'Steam Tax', But Not Until 2017

So we knew that the 2015 budget was going to start applying GST to digitally purchased goods, including games from Steam and other platforms. What we learned from last night's announcements is that this won't happen until 2017.

As Luke reports over at Gizmodo, the GST for imported digital goods won't be in place until 1 July 2017 -- more than two years from now.

That's partly because the government is waiting on international agreements on how these processes should work -- it's hard for the Australian Taxation Office to rock up to non-Australian organisations and say "start handing over your money". The OECD is working on guidelines which are expected before the end of the year.

The legislation to enable this to happen also needs to pass Parliament, though it won't necessarily face much opposition. But the 2017 start date means no change for a while. It also means we face at least two more years of Steam prices for Aussies that are often arbitrarily higher, GST or no GST.

If you're in the mood for more budget news, Gizmodo has rounded up the main tech developments and Lifehacker has summarised how Budget 2015 will actually hit your wallet.


Comments

    So they can sit back and blame the next government when this plan doesn't work out so well?

      Why not, they're still blaming Labour right now for their own fuckups as is...

        Isn't that how all governments work, regardless of the party in charge?

          The Great Australian Tradition.

          Every problem we have stems from Barton by this point.

          Last edited 13/05/15 8:44 am

          Absolutely it is! And I hereby blame the previous poster @Freezespreston for not pointing that out earlier...

          Last edited 13/05/15 8:32 am

            That guy is the worst. I wouldn't trust him.

              I hereby introduce a 10% talkbacker tax, due to @freezespreston 's inability to respond in a prompt manner.... it's all his fault. As you can see. For you know, talking before. And stuff...

              LOOK! SPINDOCTORING! WOOOOO! SHINY!

                I DON'T KNOW WHO I'M ANGRY AT OR WHY.

                I JUST KNOW THAT I'M ANGRY AND THE CURRENT GUYS TOLD ME IT'S ALL THE OTHER GUYS FAULT.

                  I think you just nailed every single election campaign lol

        Yeah kind like the labour government plunging australia into a depression every time they seize power by convincing morons like you to vote them in

          Wow, digging right back into the past to take a stab at someone for something. Malcolm, is that you?

    At it's core this isn't the worst idea in the world, all of this stuff is covered under the GST in it's physical form. With digital having taken a large portion of the sales it's subsequently taken a large chunk out of the tax revenue base.

      It's not the worst thing no. Taxes are an unfortunate necessity. When the enforceability boils down to begging and pretty pleases is when it gets silly however.

      I'm sure this is just another tax to be absorbed by the consumer that will end up not being paid by the company anyway. Seriously good luck getting Google, Microsoft or Apple to actually pay proper tax, they're more likely to laugh at us then pack up and leave.

        Ermm it's all on the consumer =P

        That's the "genius" part of the GST system..

        Gov: look guys we finally got DEM BIG UGLY OVERSEAS COMPANIES TO PAY US!
        Public: How?
        Gov: BY ADDING GST!
        Public: You mean adding in a 10% sales tax that the customer has to pay when purchasing from said companies who can shift the costs directly to the consumer w/o actually altering any corporate taxation or fix up any off shore tax loop holes?
        Gov: YES! BUT AT LEAST WE'RE TAXING THEM NAOW! PURE GENIUS!
        Public: *facepalm*

        Last edited 13/05/15 6:46 pm

      Yes but the physical goods are often bought in Australia. I don't pay tax when I buy from ozgameshop so why should I pay tax when I download from overseas?

        I believe under the the new legislation, you will be paying tax when you buy from stores like Ozgameshop (or any other online store).

          Well I don't usually purchase items over $1000 from there so I should be OK.

          Not quite, goods under $1000 will still be free from GST. So physical games from OzGameShop should still be Tax Free, but digital purchases would not. Codes are kind of a grey area where they are physical but transmitted digitally. If that's been defined I missed it.

          But if it wasn't already being taxed than the online stores on consoles will be taxed as well as digital only services like Steam, Crunchyroll, Netflix, Stan, Presto and any more that you can think of. I suspect Stan and Presto do have GST on them.

            Really? I thought the whole point was that they were removing the $1000 limit, so essentially anything bought by a person in Australia (online or in-store) would have GST... If they're keeping the $1000 threshold and just adding GST to digital purchases that seems really stupid..

            Here I was thinking there was at least some logic to the decision >_

              They want to change that $1000 limit too, but that's not something they have said in this budget.

              The problem with trying to enforce that tax is it becomes too expensive. Even if they drop it to say $500 I think most people would still happily sail under the limit. Few items I would ever want to buy go over it and I'd just split a big order.

              And I don't see 10% on the incredibly rare $500+ order something worth complaining about. When they try to charge me $1.70 on that $17 order that's when I will get annoyed. And keep in mind they can't charge me on the shipping, because when the seller purchases the Australian leg of my shipping they pay the GST.

              Disclaimer: I an not an Accountant, a Tax Lawyer or in anyway a reputable source of Financial advice.

              Last edited 13/05/15 8:35 pm

      The thing is though... None of it passes though Australia when bought... and it's out of the ATO's jurisdiction.

        They will need to make the change to AUD and effectively operate locally, much like they do in the EU where VAT is charged similarly.

          Why would they bother though? If they don't nothing can be done. It's an expense that can just be ignored.

      Consider that Steam already uses prices set by local publishers that matches retail stores. Those prices already take GST into account. It follows then that those games should remain at the same price. Otherwise people would go retail rather than Steam. (Consider also we pay US exchange rate on to of that locally set price).

      It does make you wonder though if Steam has been pocketing the portion that would otherwise have taken GST into account, doesn't it?

        Oh, they absolutely have. It's why Australia Tax is bullshit to be minimized by savvy consumers through any means possible.

        (Edit: Well. The publisher has been taking the lion's share. If a game is meant to be $60USD and sells for $90USD to match Aussie retailers charging $90AUD, then Steam will take 30% of the $80USD instead of 30% of the $60USD, then out of the extra $30 we're getting charged, that's an extra $11 Steam gets, and an extra $21 the publisher gets that would otherwise be going to Australian distributors and retailers. NOTE: That's on top of the US retail price, not the US wholesale price. This is what Aus retailers would get if they were purchasing product directly from US retailers instead of from US wholesalers. So the total profiteering is actually a lot higher than you think.)

        Last edited 13/05/15 11:07 am

          And that's why I keep buying brand new games at $40 from (sometimes questionable) cd key sellers, or via VPN and other regions.

        Let's look at a game I did yesterday GTA 5. EB sell it on PC for $89.95 with $8.99 going to the government. Steam sell it for $75 US which is close to $95 Australian and is close to EB's price but there is no $9.50 for the government.

        That's the problem, this isn't meant to benefit us it is meant to benefit the government.

        I would like to see fairer prices and less confusion come out of this. I'd also like a private jet and my own Island. The latter rather than the former seems more likely to happen.

    In principle, GST on digital goods (games) or services (Netflix) is entirely fair and appropriate - but this is expected to raise a few hundred million at best - Sweet FA in the overall economy with ZERO effort applied to dealing with the arguably greater issue of content availability. (See https://www.choice.com.au/consumer-advocacy/campaigns/access-to-digital-content)

    I'd be a lot happier if we could stop slapping around the Disabled Single Mother Veteran Jobseekers at Budget time and concentrate on rolling out my NBN and giving me a legitimate Rupert-free way of watching Game of Thrones.

    Can we finally get on with rebranding 'Abbott Liberal Government' as 'NewsCorp Canberra'?

      That is basically the point... make it look like the government is actively trying to "get income" from all these overseas companies who manage to avoid spending tax here whilst increasing domestic prices because "Australia"

      Sure they get some sort of income from the "companies" but it does sweet FA and basically doesn't do squat and if anything makes it evern *worse* for the average australian consumer. Something the government is *technically* supposed to working for

    I feel like its disingenuous to call it a "steam tax" or "Netflis tax" because It isn't singling out this particular services at all. Call it what it is, "GST expanding to include digital goods and services" instead of trying to play to the notion that gamers or digital users are being unfairly treated by the GST.

    Honestly, its just terrible journalism.

      GST expanded to try and make foreign companies adhere to Australian laws. Really, I wish them luck, because I don't think it's going to work.

      There isn't much good or actual journalism in Aus. A lot of Reporting and Reporters though.

      Media repackaged hard to understand Digital Tax to Easy for most to understand as your favourite digital service tax.

    What I'm taking from this is I need to take advantage of every Steam Sale between now and 2017. *pats credit card*
    It's gonna be OK buddy.

      I'm just going to get my US friend to buy the games I want in 2017 and gift them to me. You can't charge Aus tax to an American... :P

        Your ideas are intriguing to me and I would like to subscribe to your newsletter.

    So we get the Australia Tax from foreign companies, and we'll get the Netflix Tax from our own government. Lovely.

    So the legislation they're wanting to pass is the 'sit back and wait for someone else to tell us how to do it' measure?

    I don't understand something. Steam charges their good in US dollars.
    How can they charge AU tax on goods in US dollars? I can understand of the goods were in AU dollars. But in this case, all goods are in US dollars.

      They convert it based on the current exchange rate (or a more favourable one, if they can get away with it). All physical goods sold overseas are taxed (twice sometimes, depending on the country).

      Australia and new zealand sell in local currency now and adhere to our consumer laws aka shit game? Refund!

    I usually buy my steam games via getting keys from cheaper sites, so I don't know how they are going to enforce this idea besides picking on the major players while the smaller ones can get more customers by not bothering with GST.

    So we'll end up paying US tax and AUS tax on steam games? Because valve sure as hell wont fix that issue. Oh well, i guess Aust will remain the highest FWC for online piracy... and then the government will continue to inprison for it, etc etc etc.

    While everybody is crying foul over this, I don't think it will actually make much of a difference. I'm expecting that most services where prices are actually aimed at Australians will stay pretty much the same, and just take a little less profit - as all these services charge us as much as they believe the market will bear.

      This is what amuses me. Recent statements said they're not asking these companies to give up their profits, just to collect some GST as well.
      Companies that said they price their goods at what the market can bear.
      If the market could bear that price + 10%, then they'd be charging that now... So it would actually come out of the profits...

    How will this affect things like the steam marketplace.

    Also, they go on about how steam not having GST affects local retailers, yet a lot of games on steam don't even HAVE a physical release. Not to mention the large number of games available for less than five dollars.

    So, game publishers already push up the price on Steam to try and match local retail price (which already factors in GST) so does that mean that the Publishers/Steam are going to double dip and add ANOTHER 10% for GST on top of the prices? If so, f*ck that.

    If not (i.e Steam prices stay the same to match local retail prices) we're already effectively paying the 10% GST on current Steam prices so nothing should change too much.....

    Last edited 13/05/15 12:11 pm

      My guess is prices will stay the same. Publishers aren't stupid. They won't price themselves out of the market considering how much Steam makes compared to brick and mortar stores nowadays.

      It would have been different if it was the US, by EB Games and Target ain't exactly Walmart...

    So australian retailers have been going on about tax free imports for decades and nothing gets done, Rupert Murdoch has tax free competition for 6 weeks and suddenly we're getting slugged. I wonder what that tells you about our government?

    Last edited 13/05/15 12:23 pm

      *Sarcasm* Probably just a Coincidence. */Sarcasm*

      Last edited 13/05/15 5:51 pm

    Waiting for 'international agreements'? They're waiting on the TPP! Dear god...

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