Joe Hockey Announces the Netflix Tax Is Going Forward
Federal Treasurer Joe Hockey has confirmed on Monday that Australia will be getting a Netflix tax. According to Business Insider, the federal budget will introduce goods and services tax (GST) on digital goods, which means that consumers may have to pay an extra 10 percent for services like Netflix.
Hockey announced that the cost of online services based outside Australia, such as Netflix, will rise as the federal government prepares legislation to charge GST on services sold in Australia by companies based overseas.
“This is about the integrity of the Australian taxation system. When the GST legislation was drafted it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and e-books from overseas,” Hockey said.
The so-called Netflix tax would add 10 percent to digital goods bought online – including games, movies and books provided by overseas companies. Netflix is ready to comply with any new rules and regulations. Consequently, subscription prices for Netflix in Australia will probably rise in the near future.
The 2015 Federal Budget will be delivered on Tuesday night.