Tax to increase price for Netflix
From July 1, digital products or services purchased in Australia from overseas companies will have GST applied.
This means there will be an increase in prices for Netflix subscriptions, Spotify, iTunes and games purchased through platforms like Steam.
A Netflix spokesperson told The Daily Mail, “We collect and remit tax wherever we are legally obligated to do so.”
Netflix has not confirmed whether the Australian consumer will get hit with the entire cost of the GST or if Netflix will absorb some of it by reducing subscription fees.
Currently, Australian Netflix users pay $8.99 for a basic package, $11.99 for standard and $14.99 for premium.
Companies such as Netflix were previously utilising a legal loophole that freed them from collecting GST on digital products and services exported to Australia.
The new law closed that loophole and focused on giving local digital services such as Stan a level playing field.
When the bill was introduced, Treasurer Scott Morrison said, “It ensures Australian businesses selling digital products and services are not disadvantaged relative to overseas businesses that sell equivalent products in Australia.”