Australian consumers will soon have to brace for “Netflix Tax” as the government is adding 10% extra tax on goods brought on online services such as Amazon, Google and of course, Netflix.
Free to Air channels in Australia are happy that companies such as Netflix will now be paying the 10% Goods and Services Tax (GST). Free TV chairman Harold Mitchell told The Australian that the new measures would create a level playing field for companies competing in the TV content market and would bring relief to Seven, Nine and Ten networks.
“What we’re doing is going to digital providers overseas and saying ‘can you apply the GST to the products you provide into Australia?’,” Treasurer Joe Hockey said, according to IT News. “They are agreeable to it. It’s not their profits [being taxed]. It’s a tax collected and they remit it back to the country where that occurs.”
Netflix, the U.S.-based internet giant, arrived in Australia in March. The content streaming site has 10 % cost advantage over local players such Foxtel and Nine’s Stan. Bringing a “Netflix Tax,” thus, would close the gap between Netflix and other companies.
The proposed tax will be introduced after July 1, 2015. Complete details of the proposed tax for online companies will be known during the Federal Budget that will hit 7:30 p.m. AEST Tuesday, May 12, reports IGN.
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