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Google Apps to start charging GST

Discussion in 'Business Accounting & Tax' started by Simon Hampel, 12th Oct, 2016.

  1. Simon Hampel

    Simon Hampel Founder Staff Member

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    Just received this email from Google:

    Presumably this is a response to the government's efforts to get IT companies doing business in Australia to actually pay some tax.
     
  2. RPI

    RPI Well-Known Member

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    Same for Adwords.
     
  3. Terry_w

    Terry_w Active Member

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    Good news for the economy!
     
  4. arrowwise

    arrowwise Active Member

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    I won't how much GST will be poured into the ATO just from G alone?

    If they are attacked again in big way - it will be - look how much GST we are have and will be paying, so it automatically weakens the tax arguments right?

    Would this be a new unofficial ruling opposed onto OS companies turning over X amount?

    Would such a law be fair and equitable if it forced such companies to sell via a local company so GST etc is actually tracked and declared.
     
  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    That's exactly what Google are doing - their announcement said that from now on they will be billing via Google Australia Pty Ltd (which will be registered for GST).
     
  6. Kinnon

    Kinnon Member

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    I got an email from Adobe the other day saying they will be charging GST as of 1st Dec.
     
  7. RPI

    RPI Well-Known Member

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    For adwords what will be the net effect for the government though? Adwords would almost exclusively be for GST registered users. So my $30k plus I will now pay to Google in GST is a deducted from the GST I pay to the government.

    any product where the end user is non business then government revenues increase but for business users.
     
  8. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think it's mostly about consistency and applying the rules across the board.

    For PropertyChat, the majority of my income is GST inclusive, but a portion does not include GST (income from foreign sources - advertising commissions mostly) ... while almost all of my expenses include GST (I don't take a salary from that business - money is paid to another business inclusive of GST), so I end up with a net refund of GST collected in that business.

    However, for my consulting company (which collects money from PropertyChat and my other businesses inclusive of GST), most of my expenses are either salaries (which have no GST component), or foreign expenses (SaaS products, offshore website hosting, etc), again, which do not charge GST, so I actually have a fairly significant GST bill each quarter which is only partially offset by the GST refund received by the other companies.

    For most businesses, salaries would be the largest expense and aren't subject to GST, so there's a lot of GST being collected but not being offset by GST expenses - which ends up being paid to the government.

    The net effect to us Australian businesses from these foreign companies starting to charge GST will be minimal - but assuming those companies have local employees or are taking the income offshore and thus not offsetting their GST collections against GST expenses, then there will be more GST revenue for the government.
     
  9. Paul@PFI

    Paul@PFI Member

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    Gerry Harvey just shot himself.

    Most businesses dont use Paypal and ebay as they didnt get atax invoice and so GST wasnt an issue. Now they comply. You can expect businesses like Officeworks etc just got uncompetitive - Any business with a creditcard can now save money AND claim the GST back .....