GST and digital products & services

Check your contracts…

Effective from 1 July 2017, certain supplies of digital products and services to Australian consumers (not businesses) by overseas suppliers will be subject to GST in Australia, even if the supplier does not have a physical presence in Australia.  These rules apply to supplies of music, games, apps, movies and books as well as certain professional services.

The new rules use a vendor registration model.  That is, businesses based overseas and selling into Australia will need to register and comply voluntarily with Australian tax law.

If you or your suppliers are affected by these changes, you need to start working through the process now.  Contracts, supply agreements, licensing agreements and royalty arrangements for digital products all need to be reviewed.  For example, if you are not registered for GST then from 1 July 2017 some of the services or products you acquire from overseas suppliers may start being subject to GST.