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Preparing for overseas reporting of sales taxes

From 1st July, the Australian Government brought in new rules for GST on goods purchased from overseas.

Basically, for any sales TO CONSUMERS under $1,000 AUD, if a business has an annual turnover of at least $75,000 from sales to Australia (presumably digital and physical goods), the business is responsible for registering with the Australian Government, collecting and handing over the GST on sales.  This is similar to their approach for sales of digital services.

The EU is planning on bringing in similar rules on sales of physical goods to the EU (with a limit of €30,000 turnover for the whole of the EU).

Kashflow needs improvement to be able to handle these new rules as they are implemented around the world.  At the moment, it handles digital sales to the EU (but not to other countries outside of the EU who have digital VAT rules).

The main issue is reporting and monitoring all of the various rules as they are implemented by different countries / regions.

At the very least, we need to be able to report on sales to each country on a quarterly basis (and Kashflow could monitor the annual turnover over the previous 12 months as it does for VAT registration thresholds at present).  The report would need to differentiate between (a) digital sales, (b) physical goods sales and (c) whether the sales were to consumers or B2B.

Just to add to the complexity, the Australian rules mean that sales through an online marketplace are not covered by the above - as the online marketplace has to decide whether it meets the threshold requirements; in which case they are responsible for the collection and payment of the GST !!

As a result the whole of this area needs to be considered - maybe a checkbox needs to be added to each invoice to say whether it was sold via a marketplace or direct .....

  • Rich Mellor
  • Jul 5 2018
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