Australia, New Zealand, Switzerland – New tax obligations for offshore supplies of low value goods

Australia, as well as many other jurisdictions including New Zealand and Switzerland, are implementing new rules regarding the application of the goods and services tax (GST) or value added tax (VAT) to the supply of low value goods to consumers.

Retailers and marketplaces that sell to consumers in these jurisdictions need to be aware of these changes and take steps to ensure they are compliant with the new rules. Through extensive market research, the Australian Taxation Office (ATO) expects there could be as many as 4000 entities that are required to be registered under these measures.
As the measures have been in place since July 2018 in Australia, the ATO is now taking compliance action with all available enforcement powers. Increased media attention regarding potential non-compliance may also increase ATO scrutiny.
Under the Australian measures and the proposed New Zealand measures where the sale of low value goods to consumers are made through marketplaces, the marketplace will be the responsible entity. However, in Switzerland, the underlying seller is responsible. Therefore, retailers with different varying selling channels will need to ensure that their systems are set up to deal with these differences.
It is likely that other jurisdictions will also introduce similar measures in the future.

Our summary regarding the changes in Australia, New Zealand and Switzerland is available here.