The federal government will legislate to crack down on tax avoidance by 30 multinational companies.
“These companies are diverting profits earned in Australia away from Australia to no-tax or low-tax jurisdictions,” Treasurer Joe Hockey told reporters in Canberra on Monday.
The draft laws will be released at the time of the federal budget on Tuesday.
Netflix tax gets the green light
Overseas digital suppliers of movie downloads, games and e-books will have to charge GST under draft laws to be announced tomorrow.
Hockey said the laws would level the playing field and raise $350 million over the next four years – all of which would go to the states.
Netflix launched in Australia in March and charges $8.99 a month, making it cheaper than local players Stan, Pronto and Quickflix which must include 10% GST in their pricing.
“A tax integrity measure will ensure that the suppliers of digital products and services into Australia charge the GST on products,” Hockey said.
“We are getting good feel for the amount of money which has been sent offshore but the question is what the taxabale amount would be. A number of the companies have been open with us … it is billions of dollars.”
Hockey said this legislation is the first of its kind and that the government will consult with industry before it is implemented.
Netflix has already said that it’s agreeable to the GST. Read its statement here.